Summary
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Ethereum Price Drops to Autumn 2023 Levels: Ethereum’s price has fallen below $1,760, reaching price levels last observed in autumn 2023, driven by significant market headwinds.
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Reduced Network Activity and Tariff Concerns Contribute to Downturn: Decreased user activity and record-low transaction fees on the Ethereum network, combined with negative market sentiment following potential tariff announcements, have exerted downward pressure on the cryptocurrency’s price.
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$1,760 Support Level Key for Future Price Direction: Market analysts emphasize the importance of the $1,760 price level; failure to hold this support could lead to further price declines, while a strong move above $1,835 might signal a potential recovery, though sustained network activity is crucial.
Ethereum, distinguished as the second-largest cryptocurrency by market capitalization, currently faces substantial challenges.
These difficulties have collectively pushed its price to levels unseen since the autumn months of 2023.
Recent trading of Ethereum has come under close examination by market participants.
Specifically, the cryptocurrency’s price decreased, moving below the $1,760 mark.
This price action raises questions regarding its anticipated short-term price trend.
The drop below this crucial level necessitates consideration of potential continued price depreciation.
Decreased On-Chain Activity and Fee Levels Reported
Data from CryptoQuant, a blockchain analytics provider, indicates a reduction in user activity commencing in January.
The quantity of active addresses on the Ethereum platform has diminished to its lowest count in several months.
Simultaneously, transaction fees have decreased to unprecedented lows.
These reduced fees are substantially affecting Ethereum’s mechanism for removing tokens from circulation through burning.
Observed Price Fluctuations and Encountered Resistance
Market analysts tracked price variations during Friday’s trading session.
Throughout this period, Ethereum’s price fluctuated between $1,760 and $1,835.
Technical resistance emerged around $1,835, established by the 50-hour and 100-hour exponential moving averages.
This resistance area acted as a ceiling, subsequently leading to a downward price movement.
Tariff Policy Statements Impact Market Value
Recent announcements concerning potential tariff policies from former President Trump have exerted influence on broader market sentiment.
These statements acted as a catalyst for a pronounced price reversal, reversing an upward movement from a level of $1,955.
This event contributed to the four-hour Relative Strength Index (RSI) falling below the value of 40, signifying increasing negative market sentiment.
Challenging Fundamental Conditions and Supply Increase
Current fundamental weaknesses, when considered together with reduced network engagement, are creating a demanding environment for Ethereum’s market performance.
An expansion of Ethereum’s net supply has occurred due to diminished token burn rates.
This expansion of supply further contributes to pressures for market value depreciation.
Critical Support Level Determines Near-Term Outlook
Market analysis suggests that Ethereum’s trajectory in the immediate future is dependent on its capacity to maintain price above the $1,760 support region.
A decisive fall below this level may increase vulnerability to further price decreases.
Conversely, a clear upward movement surpassing $1,835, if accompanied by significant trading volume, could signal the start of a period of price recovery.
Ongoing low levels of network activity may persist in negatively affecting overall market confidence.
Also Read: Ethereum Transaction Fees See Sharp 59% Decline
Ethereum experienced a 59.6% decrease in transaction fees in the last quarter, reaching its lowest level since 2020, and a 49% drop in the ETH price. The fee drop is attributed to two main factors: an increased gas limit on the network and a growing user migration towards Layer-2 scaling solutions. Ethereum’s Pectra upgrade, designed to enhance the network, is scheduled to be deployed on the mainnet on May 7th. The price of ETH experienced a 49% decline during the same first quarter period, resulting in a market capitalization loss exceeding…[Read More]
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