On-chain data shows demand for the Ethereum network has continued to decline recently, a sign that the asset’s value may be bearish.
Ethereum Total Transactions Continue to Decline
As a CryptoQuant analyst pointed out director, the number of ETH transactions recently observed a significant plunge. “Transactions (Total)” is a metric that measures the total number of transfers made on the Ethereum blockchain on any given day.
A high value for this metric means that traders are currently active on the network.A low value, on the other hand, means that the chain is looking at low activity at this point. Here is a chart showing the trend of the 30-day exponential moving average (EMA) version of this indicator over the past few years.
The 30-day EMA value of the metric seems to have been constantly going down in recent months | Source: CryptoQuant
As shown in the graph above, the 30-day EMA Ethereum transaction count has been in an overall downward trend since May 2021, when ETH set its all-time high. However, the indicator has seen temporary rest periods when the trend temporarily reverses. The indicator rises before returning to a descending trajectory.
These spikes in activity coincided with local tops in cryptocurrency prices. This is a trend that makes sense as rallies usually require a large number of traders to sustain. However, similar to the upward trend of the metric, bullish momentum In the price of Ethereum, the downtrend usually resulted in observing a bearish fate for the crypto value as well.
Recently, the number of 30-day EMA transactions has plummeted again, indicating that there is still no demand for cryptocurrencies in the market. And if the recent pattern holds up, this drop could lead to a plunge in Ethereum as well.
ETH Price
At the time of writing, ethereum price Last week it gained 1% and is hovering around $1,200. Over the past month, cryptocurrencies have gained 1% in value.
Below is a chart showing the price trend of the coin over the last 5 days.
Looks like ETH has been at a standstill in the last few days | Source: ETHUSD on TradingView
Ethereum has been trapped in a sideways move for some time, but it is unclear when the cryptocurrency will be able to escape this consolidation. If the number of transactions metric is anything to consider, the break could come quickly and go in a direction ETH investors don’t like.
Becca featured image on Unsplash.com, TradingView chart, CryptoQuant.com
