Ethereum Remains Above $1,700 Despite Record High

Ethereum Remains Above $1,700 Despite Record High Accumulation

After surviving weeks of negative pressure, Ethereum (ETH) is showing signs of recovery as it remains stable above $1,700. However, there are conflicting indications for the long-term prospects of ETH/USD. Technical indicators indicate a possible recovery, but fundamental on-chain metrics doubt the Ethereum ecosystem’s ability to grow steadily.

Record Increases in ETH Accumulation Despite Positions Underwater

On April 22, Ethereum experienced its largest single-day influx into accumulation addresses with 449,000 ETH (about $785 million at current prices) entering long-term holding wallets. Despite recent price declines, this unprecedented accumulation suggests strong investor confidence.

The realized price of $1,981 indicates that present holders of ETH are underwater on their investments of $1,557, hence these accumulations will have a difficult time surviving. Since 2018, Ethereum’s realized price has typically been lower than the market price, indicating a noticeable shift from its historical tendencies.

The Ethereum Network Is Activating Despite Low DeFi Participation

Between April 20 and 22, the number of active addresses increased by about 10%, from 306,211 to 336,366, indicating that Ethereum’s network is showing signs of recovery. This increase in user engagement suggests that network interest is growing with the most recent price recovery.

Although this is positive, there is still little activity in decentralized finance (DeFi), which was once Ethereum’s most popular use case. Decentralized exchange (DEX) volumes continue to decline, with weekly transactions hovering around 1.3 million, indicating a lackluster boost in this crucial sector.

Network Fees at Five-Year Lows Signal Demand Concerns

The steep decline in Ethereum network fees, which have fallen to five-year lows of between $0.16 to $0.31 per transaction, may be the most concerning development for long-term bulls. This steep decline indicates a significantly reduced base layer need for block space.

According to Brian Quinlivan, marketing director at Santiment, “this notable decrease in fees correlates with fewer people sending ETH and interacting with smart contracts.” The 95% drop in Ethereum fees since January has created an inflationary environment for ETH since the built-in burn mechanism no longer offsets newly generated currencies offered for staking rewards.

Technical Resistance in ETH/USD and Possible Fractal Patterns

At $1,895, where investors who bought Ethereum in November 2024 have almost 1.64 million of the cryptocurrency, it confronts significant opposition. A natural selling pressure is produced by the supply concentration at this level, particularly if investors are attempting to break even or turn a profit after suffering recent losses.

Another important technical signal to keep an eye on is Ethereum’s proximity to the 50-day exponential moving average (EMA). A persistent upward rise over this level could offer a path for recovery, while a failure to break above it could suggest further bearish momentum.

Additionally, some traders are wary of the emergence of a potentially negative fractal pattern, a recurrent price structure that has already resulted in significant declines.

Will Institutional Interest Be Impacted as More Crypto ETFs Launch?

Institutional sentiment toward Ethereum appears to be easing, as evidenced by the $10 million in net outflows from US-listed spot Ether ETFs between April 21 and 23. The ETFs for Bitcoin, on the other hand, experienced record-breaking flows during the same time frame.

However, institutional demand for Ethereum is declining as investors in competitor networks like Solana and XRP remain optimistic about potential approvals for their own spot ETFs in the US market.

 

 

 

 

 

 

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