The second-largest cryptocurrency, Ethereum, had found a little grip around the $3000 level a couple of days before. However, that didn’t last long as the lead altcoin slipped from $3,030 and spiked below $2,800. Currently, the Ethereum price is trying to gain an upside correction.
At the press time, ETH price is valued at $2,881 with a downfall of 3.81% over the last 24hrs.
Ethereum To See Further Downside
Ethereum’s native coin Ether’s current price chart is on a bearish pull and it depicts a large decline of 11% over the past month. On the other hand, other financial assets have seen even steeper corrections in the same time. The Invesco China Technology ETF (CQQ) is down by 31% and the Russell 2000 is down by 8%.
Currently, as the ETH price is hovering around $2,890, traders are worried that if the ETH fails to sustain this level and falls below $2,850, the currency could experience a strong pull. However, this depends on how the derivative traders will be positioned parallel with the Ethereum network on-chain metrics.
According to DeFi Total Value Locked (TVL) aggregator, DeFi Llama, the Ethereum network’s Total Value Locked (TVL) has found a bottom at 27 million Ether over the last 30 days. Total Value Locked or TVL is one that measures the number of coins that are deposited on smart contracts and this also includes decentralized finance (DeFi), non-fungible token (NFT) marketplaces, gaming, and other high-risk applications.
On-Chain Metric Shows Bearish Signal
It is to be noted that the active addresses on the network, which give a quick and reliable indicator of effective use, could be misguided with increased layer-2 solution adoption. However, this metric just works as a starting point.
At present, the daily average active addresses stand at 584,477 which has decreased by 4% over the last 30 days. Hence, the data reveals that the transactions of Ether token are not showing any sign of growth, at least on the initial layer.
So, traders should depend on DApp usage indicators, however, they should avoid giving their entire focus on the TVL as this metric is mostly concentrated on Defi applications.
Aso the Ethereum DApps active addresses have succumbed in the last 30 days. Hence, we can say that the overall data is negative when compared to Solana which saw a 34% increase in active addresses.
Unless Ethereum doesn’t see an uptrend in Ether transactions and DApp usage, the Ethereum price might not hold its position above $2,850 causing more short-term price corrections.