ETH trading at $3000 but demand on the decline
ETH quickly broke below support and traded as low as $2852 on May 1. Its futures open interest has decreased significantly since April 10.
Ethereum (ETH) recently crossed above the 20-day simple moving average (SMA), which could lead to a deeper decline in the short term. When the price of an asset falls below the 20-day SMA, this usually indicates that the short-term trend of that asset is bearish. Traders often see this as a sign that sellers are in control and the price could continue to fall.
ETH price movement data on the 1-day chart shows that the price fell below the 20-day SMA on April 30. As selling pressure increased, ETH broke support and closed the trading session on May 1 at lows of $2850. Although the price has dropped to $2,913 at press time after 24 hours, the bullish pressure remains too weak to sustain any significant price increase in the short term.
Source: ETH/USDT on TradingView
On May 1, ETH's MACD line (blue) crossed above the signal line (orange) in a downtrend as the price fell below support. This intersection is a bearish sign. Both lines are below the zero line, which, when this happens, will confirm the current downtrend and indicate the possibility of a further decline in ETH price.
At the same time, ETH's Aroon Downlink (blue) at the time of this writing is 92.86%. This indicator identifies trend strength and potential reversal points in the price movement of an asset. When the Aroon Down line is near the 100 level, this indicates a strong downtrend and that the price has recently reached a relative low.
Related: SEC continues to delay immediate Ethereum ETF approval
Additionally, major ETH momentum indicators have shown a significant decrease in demand for altcoins. The relative strength index (RSI) is currently 36.46, while the money flow index (MFI) is 33.96. The values of these indicators show that market investors are prioritizing the distribution of ETH over the accumulation of new coins.
Source: ETH/USDT on TradingView
An assessment of ETH's network activity using a 30-day average confirmed a decline in demand for the altcoin over the past month. According to data from Santiment, the number of daily addresses involved in at least one ETH transaction last month decreased #Web3 7%.
Similarly, the number of new addresses created for ETH decreased last month. On-chain data shows this number has decreased by 10% in the past 30 days.
