Challenges Ahead for Ethereum: The Difficulty of Surpassing $2,850 in Value

Ethereum, the second-largest cryptocurrency by market capitalization, has experienced a downward trend that originated in August and has now extended into September. Currently, ETH is trading at $2,338, reflecting a 1.3% decrease in the last 24 hours and a 2% drop over the previous week. Despite this, the asset has not shown any significant upward movement since the beginning of the month, causing concerns among investors regarding its short-term direction.

Dean Crypto Trades, a notable crypto analyst, recently shared insights on Ethereum’s future, suggesting that the downward trajectory might persist for some time. According to the analyst, Ethereum’s price is likely to remain volatile while trading within the $2,100-$2,850 range, with the latter serving as a crucial resistance level. Although there is a possibility of a recovery, breaking free from the current trading range and regaining bullish momentum could be a gradual process.

Examining Ethereum’s fundamentals amidst the bearish price action reveals some positive indicators for a potential recovery. One significant factor to consider is the level of retail interest in the network. Data from Glassnode indicates a spike in active addresses to over 589,000 in mid-August, followed by a decline to 377,000 by the end of the month. However, active addresses have shown a steady increase since the start of September, surpassing 438,000. This rise in active addresses suggests renewed interest from retail investors, which could bolster the asset’s price in the upcoming weeks.

Moreover, analyzing Ethereum’s exchange supply ratio, which measures the proportion of the total ETH supply held on exchanges, reveals a ratio of 0.141 as of now, according to CryptoQuant. A lower exchange supply ratio implies that investors are transferring their assets off exchanges to cold storage, indicating a reduced likelihood of short-term selling pressure. This shift could contribute to price stability for ETH, although monitoring this metric closely is essential as any significant changes could signal a shift in market sentiment.

In conclusion, while Ethereum faces challenges in its price performance, the uptick in active addresses and the decrease in exchange supply ratio offer hope for a potential recovery. However, navigating the current market conditions and breaking through key resistance levels may require time and sustained momentum.