As the price of Ethereum (ETH) struggles to break free from the critical $1,600 level, traders are growing frustrated due to the ongoing consolidation. Nevertheless, several on-chain indicators have shown conflicting signals in recent hours amid Ethereum’s decreased volatility. As a result, there is a higher chance of robust price movement for ETH in the coming week.
Ethereum supply reaches 1-month low
Based on insights from Glassnode’s data, there has been a notable increase in activity among short-term Ethereum holders in the past few hours. On-chain data shows that the amount of Ethereum supply that was last active within a week to just a day ago has now reached its lowest point in a month. With the 1-day moving average (MA) falling to 926,194,509 ETH, this signals a sentiment shift in Ethereum’s on-chain activity.
A lower number of Ethereum coins held by short-term holders who have not moved them in a week or less indicates that these holders are actively participating in buying and selling, rather than holding onto their assets. This could be a sign of increased short-term trading or a shift in sentiment among short-term traders. This could trigger selling activity on Ethereum’s small rallies.
Nevertheless, Santiment notes a remarkable development. Ethereum’s average fee has hit a nine-month low, reaching the level of $1.15, a figure last observed on December 26, 2022. According to Santiment, historical data suggests that Ethereum’s utility tends to increase when ETH becomes more affordable to trade, what could accelerate ETH’s recovery.
It’s worth highlighting that Ethereum’s average fees could still drop significantly as layer 2 solutions continue to siphon a large portion of transactions from the Ethereum network. This is another factor contributing to the declining average fees observed in the Ethereum network.
What’s next for the ETH price?
Ethereum continues to be rejected on the 20-day Exponential Moving Average (EMA) at a price of $1,602, indicating continued bearish sentiment and sellers’ tendency to profit from price increases. At the time of writing, ETH price is trading at $1,588, down over 0.55% from yesterday’s price.
The bears are poised to further strengthen their position by pushing the price below the critical support level at USD 1,570. If they succeed, ETH price could start a downtrend, with the subsequent significant support level being at $1,531.
Conversely, if the price reverses from its current position or experiences a recovery from the $1,570 mark, this could indicate that buyers are becoming active at lower price levels. The first indicator of renewed strength will emerge in a breakout and close above the $1,623 level, potentially paving the way for a bullish rally towards the $1,674 level.