Ethereum consolidates ahead of the Merge
Ethereum’s price range is between $2,500 to $3,000 and there is little information about where it is going next.
The second-largest cryptocurrency in market cap is still stagnant and the activity on its network continues slowing down. The network growth is often considered to be one of the best price predictors. A steady decrease in the number created on a particular blockchain will lead to falling prices over time.
Glassnode’s on-chain data shows that there has been a sharp decline in the number of daily Ethereum addresses joining the network since the peak in November 2021. The number of addresses added to the network reached a peak of 193,000 on October 28, 2021 and a low of 70,000. on February 24, 2021.
The number of daily addresses added to the network appears to be on the rise, hovering at 86,000 at press time. However, there is still no clear trend reversal. An increase in the number of addresses joining the network every day to 93,000 could signal a new uptrend.
While speculation around Ethereum’s upcoming switch to Proof-of-Stake consensus, otherwise known as “the merge,” could help ETH rally, a new uptrend would only likely be supported by a spike in network growth. Although the merge is expected to ship by Q2, the launch date has yet to be confirmed.
If prices increased ahead of Ethereum’s long-awaited protocol upgrade, transaction history shows that the most significant concentration of ETH was acquired at an average price of $3,100. According to IntoTheBlock’s Global In/Out of the Money model, roughly 4.4 million addresses have previously purchased 19.25 million ETH around this price level.
Only a decisive daily candlestick at or near the $3,100 supply wall is likely to bring about the resumption the uptrend.
It is important to note that the $2160 support level is acting as a strong foothold and could prevent ETH incurring further losses. While it is reasonable for ETH to maintain above this price point it could fall to $1,800, or even $1,400 if it shows weakness.