According to on-chain analytics firm Santiment, "ETH is still seeing very low levels of new addresses, the lowest in over 2 years."
? As #Ethereum crept back above $1,800 once again a few minutes ago, we're monitoring long-term fundamentals that would signal a turnaround for the #2 asset in #crypto. $ETH is still seeing very low levels of new addresses, the lowest in over 2 years. https://t.co/0sXU6D6igO pic.twitter.com/jf6gySyz0j— Santiment (@santimentfeed) June 9, 2022
New addresses refer to newly created addresses that get their first deposit in Ethereum. New addresses serve as a proxy for new money entering a crypto-asset. This could be perceived as a sign of optimism or even FOMO in some circumstances (fear of missing out). Zero balance addresses, on the other hand, are a representation of money leaving a crypto-asset. They suggest that investors are losing interest in or belief in an asset, or that they are acting in fear.
Ethereum network activity remains a useful statistic for determining the direction of the ETH trend. Lower lows indicate bearish patterns, whereas higher highs suggest bullish ones.
In shorter time frames, the total number of addresses with a balance can indicate trader positioning and serve as a potential indicator of price action.
According to Santiment, Ethereum is seeing a decline in new money entering the network. With fewer people utilizing ETH to make transactions and buy NFTs, Ethereum's price subsequently declined. Thus, a pick-up in network activity might signal a price turnaround in general circumstances.
Ethereum price action
After reaching highs of $1,918, Ethereum tested the support at $1,725 on June 7. Between the downsloping daily MA 50 and $1,700, the price is currently constrained.
In the following days, a range extension is possible, which might prepare the way for the next directional move. If buyers lift the price beyond the psychological level of $2,000, Ethereum could confront a huge barrier near $2,700, where the bears could mount a powerful defense. If the price falls below it, the pair may be trapped inside its present range for some time.
A break below $1,700 might herald the start of a new slump, while a break toward $2,700 could suggest the start of a bottoming process. Ethereum traded at $1,768 at the time of publication.