Ethereum network drops to 6-month low – here's how it affects ETH

• Ethereum fees have reached a six-month low in the past seven days.
• ETH fell 6%, and metrics looked bearish.

As L2s gain popularity, Ethereum [ETH] Network usage fell to its lowest level in six months.

This is in line with Vitalik Butarin's 2020 roadmap, which aims to enhance scalability by offloading transactions from the mainnet.

Meanwhile, ETH bears entered the market and pushed the price of the token lower.

Ethereum network activity is diminishing

IntoTheBlock recently published a tweet Highlighting the fact that ETH fees fell to a 6-month low this week falling by more than 29%.

The decline in ETH fees reflects a shift in activity to more than 50 direct layer 2 networks. To find out what's happening with Ethereum, AMBCrypto analyzed Artemis Data.

It is worth noting that overall activity on the network has decreased, along with a decrease in daily active addresses for the blockchain last week.

Source: Artemis

Daily transactions of ETH also followed a similar trend. Lower fees also caused blockchain revenue to decline last week.

Notably, it was surprising to see blockchain usage decline when the price of its gas dropped. According to YchartsThe price of ETH gas decreased from 47.5 gigawi to 8.5 gigawi during the past month.

Ethereum turns bearish

As blockchain network activity diminished, price action also turned bearish. according to CoinMarketCapThe price of ETH has fallen by more than 6% in the past seven days.

At the time of writing, it is trading at $2,920.99 with a market cap of over $350 billion.

AMBCrypto's look at Glassnode data revealed a possible reason behind this price drop. We found that the number of ETH addresses with balances above $100K has decreased over the past seven days.

This clearly indicates that the whales were selling their property.

Source: Glassnode

And it wasn't just whales, selling sentiment was generally dominant in the market. Our analysis of Sentiment data indicated that ETH exchange flow rose twice last week.

In addition, supply on exchanges increased. This indicates heavy selling, which could lead to a price correction.

Negative price movement also had a negative impact on market sentiment. Ethereum-weighted sentiment has declined in the past few days, suggesting that bearish sentiment around the token has been dominant.

Source: Santiment

AMBCrypto then analyzed the daily chart of ETH to see if another price drop was likely.

We found that the Relative Strength Index (RSI) was falling below the neutral mark. The Money Flow Index (MFI) also registered a slight decline.

is reading Ethereum [ETH] Price prediction 2024-25

The altcoin king was resting below the 20-day simple moving average (SMA) at press time, indicating a further decline in price.

ETH price has reached the lower bound of the Bollinger Bands indicator, which could lead to a trend reversal.

Source: Trading View