Ethereum On-chain Data Reminder: Network Activity Decreases, ETH May Drop in the Short Term
In the past month, Ethereum (ETH) has risen by 35%, but several on-chain indicators suggest that the price may need to correct. ETH surged past the $4000 mark, raising concerns that it may have risen too much.
As the price reaches this critical level, indicators show that selling pressure may increase, causing the price to dip before rising again.
Ethereum Shows Signs of Bearishness
One on-chain indicator that shows a downward trend is the gap between price and Daily Active Addresses (DAA). Simply put, it measures whether the value of the cryptocurrency is rising along with user activity.
If this indicator is positive, it indicates that user activity is high, and the price may continue to rise. However, if it is negative, it suggests decreased network activity, which may halt the upward momentum.
According to Santiment data, the price DAA gap for Ethereum has dropped to -64.17%. This significant drop indicates that the number of addresses interacting with the cryptocurrency has decreased. From this perspective, ETH's price may fall.
Ethereum Sell Signal Activated
There is a divergence between price and Daily Active Addresses.
Additionally, BeInCrypto looked into token holding time and found unfavorable conditions. Token holding time measures how long the cryptocurrency has been held by people without being sold.
If the holding time is long, it indicates that most people do not plan to sell. However, if the holding time is short, it suggests something is amiss.
IntoTheBlock reported that since December 6, the holding time for Ethereum has decreased, indicating that this cryptocurrency is being sold off. If this trend continues for a few more days, ETH's price may drop below $3900.
Ethereum Holder Activity
ETH Price Prediction: Will it drop below $3800?
On the 4-hour chart, Ethereum's price encountered resistance at $4073, then retraced to $3985. Additionally, the Cumulative Volume Delta (CVD) has also fallen into negative territory.
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