The price of Ethereum is facing pressure again after failing to break through a two-month downtrend. ETH attempted to recover last week but quickly lost momentum.
The weakening support from investors has pushed Ethereum down further, raising concerns about its ability to recover sustainably in the short term.
Ethereum is losing investor support
Blockchain data shows that the profit levels of long-term and short-term holders have both declined, with both groups now having similar profit capacity, reflecting reduced confidence in the market. This convergence indicates that neither group is realizing significant profits at current price levels.
The MVRV Long/Short Difference has dropped below the zero line, reinforcing this trend. This indicator suggests that both long-term and short-term holders do not have significant unrealized profits. If this indicator drops further, short-term Ethereum holders may gain an advantage, increasing downside risks and reflecting vulnerability in investor confidence.
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The overall activity in Ethereum's big picture is clearly weakening. The number of addresses active on the network has dropped to a seven-month low, reflecting a decrease in participation from ETH holders, indicating a retreat in engagement with the network as prices continue to weaken.
This decline in activity signals that investors see limited incentives for transactions during price stagnation, as reduced network usage often reflects waning confidence. Without new demand or activity spurred by catalysts, Ethereum may struggle to regain momentum in the short term.
ETH is trading at 2,929 USD, marking its third drop below 3,000 USD this month. The price's attempts to break resistance last week could not be sustained. This rejection has reinforced the ongoing downtrend and indicates limited buying interest at higher price levels.
Downward indicators suggest that Ethereum might retest support at the 2,762 USD level again, which has historically acted as a key support area. However, despite the downward pressure, a deeper decline seems to have limits unless overall market conditions worsen significantly.
Changes in the investment atmosphere may impact this trend, including maintaining above 3,000 USD to regain support, which remains critical. If ETH can stabilize above this level, it might open up the opportunity for ETH to test 3,131 USD. This recovery would undermine the bearish outlook and signal a potential breakout from the downtrend.
