What’s keeping ETH below $3,000?

Ethereum price is trading at $2,700 on August 23, lagging behind XRP and AVAX in terms of monthly performance. Three technical indicators offer insight into why ETH price has struggled to maintain its bullish momentum over the past month.

Ethereum price falls behind XRP, AVAX

Global crypto markets continue to find buyers and attract institutional demand despite uncertainty in the global macroeconomic landscape. While Toncoin and Litecoin were boosted by the news of cryptocurrency legalization in Russia, Solana and XRP were boosted by optimistic news from Brazil and the US.

Yet strangely, despite capital inflows of over $10 billion from the newly launched Ethereum ETFs last month, the ETH price continued to struggle to maintain its uptrend.

Looking at the chart above, we can see that Ethereum’s price has failed to rise above the $2,780 mark despite several attempts since August 14. At the time of writing on August 23, ETH is trading at $2,660, 6% below the aforementioned 14-day high.

While Ethereum’s price is struggling, demand remains strong across the rest of the altcoin market. As seen above, the TOTAL3 chart, which tracks the total valuation of all cryptocurrency assets except Bitcoin, shows an impressive 5.8% increase over the same period.

Ethereum network usage drops by 35%

Currently, Ethereum represents 15.07% of the global crypto market. When such an important asset lags behind the general market trend, it indicates the presence of internal bearish signals.

Looking at the underlying on-chain data, there has been a significant decline in user activity on the Ethereum network over the past month. The Active Addresses chart above from IntoTheBlock shows the number of unique wallet addresses making a valid transaction on the Ethereum blockchain network.

Looking at the chart above, we can see that Ethereum attracted 487,770 active addresses as prices shot up to the local high of $2,777 on August 14. However, there has been a significant downturn since then.

At the time of writing, the latest on-chain data shows that Ethereum attracted only 317,305 active addresses on August 22, representing a 35% drop in network demand.

This decline in active addresses can negatively impact Ethereum in several ways. First, it indicates a decline in network utility and demand. With fewer users transacting, deploying smart contracts, or interacting with decentralized applications (dApps), the overall demand for Ether is decreasing.

As demand decreases, so does the price as fewer users are willing to purchase Ether for on-chain activities. This lower demand often puts downward pressure on prices and contributes to a bearish forecast for Ethereum.

ETH Price Prediction: Further Consolidation Before Breaking Above $2,800

Based on the current on-chain indicators and market conditions, Ethereum’s price struggles over the past two weeks are closely linked to the decline in network activity. Although the overall sentiment in the crypto market remains cautious, Ethereum bulls are showing remarkable resilience to hold the $2,600 support.

This resilience could help Ethereum maintain relatively high support levels and potentially trigger a significant breakout in the next phase.

If Ethereum price manages to sustain above the $2,600 support level, the bullish sentiment could intensify and lead to a possible rally. A successful breakout above $2,800 could validate the short-term bullish breakout, with the $3,000 level considered the long-term target.

On the downside, the Bollinger Bands technical indicator highlights a key support level at $2,412, where the bulls are likely to mount a strong defense. A break below this level could negate the bullish projection, but a robust recovery could reignite buying interest and push the price towards the $2,500 mark.