The price of Ethereum seems to aim to recover the key level of 3,000 dollars, but the on-chain indicators of the dApps highlight a decline in activities, suggesting caution in speculations.
Furthermore, the Ethereum ETF market is experiencing disappointing results, preventing the cryptocurrency’s price from taking off.
Let’s see everything in detail below.
On-chain activity of dApps on Ethereum declining: possible indicator of weakness for the price of ETH
Observing the trend of on-chain metrics on Ethereum dapps, we notice that the recent price recovery has not been supported by network activities.
In the last 3 months, the TVL of the crypto network has experienced a significant contraction dropping from 58.7 to 47.3 billion dollars.
At the same time, transaction volumes have also dropped drastically after the last trading peak on August 5, highlighting little speculative interest. It is also noteworthy how some top dApps, such as Uniswap and Balancer, have reported a dramatic decline in network requests.
All this is not particularly alarming, considering that the sum of the capital locked on Ethereum corresponds to 55% of the locked value of the entire blockchain landscape.
Furthermore, broadening the horizons, 2024 appears overall positive since from January the Ethereum dapps have added 17 billion dollars.
Let’s say that in general terms the L1 chain has followed a trend comparable to that of its competitors, without recording particular moments of dominance in the market.
Very interesting to also observe how from May onwards the number of new addresses on Ethereum has shown a strong downward trend.
In just 5 months, the 7-day average of new network addresses has decreased by about 40%, reaching the lowest values recorded since December 2024.
In particular, at the moment we find an average of 90,000 new addresses compared to 150,000 in May. The network transaction chart reflects more or less the same pattern, highlighting a low demand for blockspace with low gas prices.
This situation shows how there is little retail activity on Ethereum such as to trigger a parallel increase in the price of the coin.
Ethereum price undecided: ETF performance does not help
While the on-chain values of Ethereum dapps do not provide a narrative to push the price of the coin in a bull direction, the data from the ETFs further complicate the picture.
Since the launch in July of the much-anticipated ether exchange-traded funds, we can count today a total net outflow of 554 million dollars.
According to SosoValue data, the “Total Net Assets” of the suppliers has decreased by about 3 billion dollars in these months, going from 10 to the current 7 billion dollars.
The initial results of the Ethereum ETFs were therefore not as hoped, and they contributed negatively to the cause.
In fact, while on one hand the same investment products on Bitcoin have led to an increase in the cryptocurrency’s prices, here the opposite happened.
Since July, ETH prices have been in a downtrend, suggesting an incorrect market narrative that hypothesized an inflationary impact on the cryptocurrency after the ETFs.
Investors are disappointed because its supply continues to increase despite a steady network dApp activity base.
The same Vitalik Buterin, co-founder of Ethereum, has spoken publicly to express his views on the topic of ETH supply.
According to the expert, it is necessary to improve transaction times through solutions like single-slot finality. Currently, Ethereum transactions can take about 15 minutes, leading to network congestion and limiting its efficiency.
It is evident that the developers of the chain are making Ethereum increasingly functional, adding technical innovations with each update.
The blockchain improves step by step in terms of programmability and scalability, but it does not keep the “promises” made to the investors.
In 2023, they indeed believed that after EIP-1559 ETH would become deflationary through a supply burn rate.
After 1 and a half years, this vision turns out to be a failure, with an inflation of about 1,000/2000 ETH issued by the network every day.
Analysis of ETH-USDT and ETH-BTC Charts: Bullish Restart?
Despite the on-chain indicators and the values of the dapps highlighting a negative outlook for Ethereum, the analysis of the charts seems to offer a contrary perspective.
At this moment, prices are moving above the daily EMA50, on the brink of a local resistance in the 2750 dollar area that separates the chart from the 3000 dollar level.
The cryptocurrency seems to have hit the bottom after the crash on August 5, suggesting a retest pattern to the downside and subsequent inversion.
The medium-term trend is still constrained in a downtrend perspective, but the structure formed in the last two months suggests a strong bull movement is coming.
Volumes and RSI do not offer particularly relevant insights, but the possibility of a recovery in prices in the last quarter of the year clearly emerges.
If in the short term ETH manages to bring its price back above 2850 dollars, it could fuel a wave of optimism that pushes it towards new horizons.
We are, however, still very far from the forecasts put forward by the London bank Standard Chartered, which hypothesized ETH at 10,000 dollars by the end of the year.
Observing the ETH-BTC chart, we notice that in recent days the dominance of the orange coin over the rest of the market seems to have decreased.
For two years now, Ethereum has been in a downtrend against Bitcoin, suggesting a tendency among investors to accumulate digital gold.
From September 2022 to today, there has indeed been a decline in quotations of about 50%, going from 0.008 sat to the current 0.038 sat.
Despite this, since mid-September the bearish strength seems to have subsided, hinting at the same time a timid restart approach.
At the moment, prices are moving sideways, waiting to make the next move.
It is probably too early to venture a hypothesis of a restart, but we can say that all the conditions are in place to do so.
The first signal to return bullish on ETH is the recovery of 0.044 sat, with the subsequent target above 0.05 sat.
