Ethereum's price has once again come under pressure after failing to break out of a two-month downward trend. ETH attempted a short rise last week but quickly lost momentum.
Weak support from investors has pushed Ethereum lower, raising concerns about whether the cryptocurrency can maintain a meaningful rise in the short term.
Ethereum is losing support from investors
On-chain data shows that profit levels for both long-term and short-term traders have fallen. Both groups now have nearly equal profitability levels, signaling weakened confidence in the market. This convergence suggests that neither group is realizing significant gains at the current price level.
MVRV Long/Short Difference has fallen below the zero line, reinforcing this trend. The metric shows that neither long-term nor short-term traders have dominant unrealized gains. If the indicator falls further, short-term Ethereum traders' gains may dominate, increasing downside risk and reflecting fragile investor sentiment.
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Ethereum's macro activity has weakened significantly. The number of active addresses on the network has fallen to its lowest level in seven months. This decline shows reduced participation from ETH holders and signals less engagement with the network during the ongoing weakness in the price.
Lower activity suggests that investors see little incentive to carry out transactions when the price is stagnant. Reduced network usage often reflects declining confidence. Without increased demand or catalysts, Ethereum may struggle to regain momentum in the short term.
ETH is trading at $2929 and has therefore fallen below $3000 for the third time this month. Ethereum's attempt at a price increase earlier last week was unsuccessful. The rejection reinforced the prevailing downward trend and showed low buying interest at higher levels.
Bearish indicators suggest that Ethereum may test the support level at $2762. This area has historically acted as a significant support level. Although there is downward pressure, a deeper decline seems limited unless market conditions worsen significantly.
A shift in investor sentiment can change the outlook. Regaining $3000 as a support level is crucial. A sustained move above this level could give ETH the opportunity to challenge $3131. Such a rise would invalidate the bearish thesis and signal a breakout from the downward trend.
