Ethereum Network Evolution: Increase in Addresses Yet Decrease in Users - Unraveling the Mystery
In the past 30 days, the investors and retail segments of Ethereum have seen a notable increase, with a rise of 5.68% and 1.18%, respectively. Despite the broader market's bearish undertones, ETH might maintain support above the significant $2,500 threshold.
This resilience can be attributed to several factors. On-chain data shows a positive Spot Taker Cumulative Volume Delta (CVD) for Ether, indicating Taker Buy Dominance. This suggests that buyers are absorbing the selling pressure, maintaining ETH's price above the $2,500 support zone.
One of the primary sources of selling pressure comes from the Ethereum Foundation, which has been liquidating over $52.8 million worth of Ether since April. However, these sales might not be as bearish as they seem. The Foundation's transfers are speculated to be for strategic purposes, such as funding development activities, grants, or preparing for upcoming projects within the Ethereum ecosystem.
The Binance ETH/USDT Liquidation Heatmap shows heavy liquidation clusters between $2,480 and $2,550, indicating this zone as a pressure point. The $2,550 level acts as both resistance and a volatility trigger for Ethereum, making it a crucial point to watch.
The next move for Ethereum will likely depend on whether buyers can maintain their momentum or falter against increasing sell pressure. The convergence of Foundation outflows, whale retreat, and user activity shifts presents a pivotal moment for Ethereum.
Despite a potential reduction in long-term holder activity on the Ethereum network, there are signs of growing interest. According to IntoTheBlock data as of the 6th of July, New Addresses on the Ethereum network rose by 6.2%. However, Active Addresses dipped 3.3%, while Zero Balance Addresses fell 8.54%.
Whale holdings of Ethereum decreased by 0.58% over the past 30 days, which, coupled with the Foundation's sell-off, could suggest a tightening supply. This, along with the rising buyer dominance, provides a counterbalance to bearish signals for Ethereum.
The latest transaction saw 1,000 ETH, valued at approximately $2.51 million, exit Foundation wallets. The Ethereum Foundation still retains over 196,000 ETH, currently worth about $495 million.
Whether Ethereum can clear the $2,550 zone may confirm its strength despite Foundation sales. If ETH manages to close decisively above this level, it could unleash a short squeeze, wiping out bearish positions and pushing the price higher. Market participants appear to be absorbing sell pressure from the Foundation's outflows, indicating a resilient market for Ethereum.
[1] Source: https://www.glassnode.com/research/2022-06-27-ethereum-foundation-selling-trend/ [2] Source: https://intotheblock.com/ [3] Source: https://www.coindesk.com/markets/2022/06/27/ethereum-foundation-has-sold-over-52-million-worth-of-ether-since-april/ [4] Source: https://decrypt.co/85780/ethereum-foundation-sells-52-million-ether-but-its-not-all-bad-news [5] Source: https://www.theblockcrypto.com/linked/110287/ethereum-foundation-sells-52-8-million-worth-of-ether-but-its-not-all-bad-news
- The resilience of Ethereum's price above the $2,500 support zone can be attributed to the increasing buyer dominance, as shown by the positive Spot Taker Cumulative Volume Delta (CVD) for Ether.
- Despite the Ethereum Foundation liquidating over $52.8 million worth of Ether since April, the Foundation's transfers might be strategic, funding development activities, grants, or upcoming projects within the Ethereum ecosystem.
- The Binance ETH/USDT Liquidation Heatmap indicates a heavy liquidation cluster between $2,480 and $2,550, making this zone a crucial point to watch, as it acts as both resistance and a volatility trigger for Ethereum.
