Ethereum has been struggling recently, with its market cap decreasing by 36% over the past seven weeks. This drop has significantly impacted the number of profitable ETH tokens since their mining, shaking investor confidence.
What’s Driving the Price Down?
Santiment reports that investor sentiment has turned negative, leading to increased selling pressure. Many retail traders are selling their tokens amid fear, uncertainty, and doubt, causing daily trading volumes to decrease by 20% to 15.2 million ETH. Additionally, the number of active addresses and transaction volumes on the Ethereum network has dropped by 12% and 18%, respectively.
Technical Indicators Flash Bearish Signals
Technical indicators also show a bearish trend. The RSI for ETH/USD sits at 32, indicating an oversold market. However, the MACD confirms the ongoing downward trend. Widening Bollinger Bands suggest increased volatility and the potential for more price swings.
Is There a Silver Lining?
Despite the current weakness, there are signs of potential recovery. Analyst Maxpain highlights that Ethereum’s Network Realized Profit/Loss metric signals capitulation, often a sign of strong price rebounds. Moreover, whale transactions of over $100,000 have been increasing since late January, indicating that large investors are quietly accumulating ETH in anticipation of a future rally.
While Ethereum faces several challenges, some analysts believe the market may recover due to positive long-term signals and the interest of large investors.
