Ethereum Network Activity Cools Off: Will $ETH’s Price Go Any Farther This Month?

Ethereum, remains a critical player in decentralized finance due to its robust ecosystem of decentralized applications, smart contracts, and continuous technological advancements like Ethereum 2.0. 

The report analyzes Ethereum's current and future pricing using fundamental and technical analysis. 

Fundamental Analysis

1. Ethereum On-chain Growth

Recent data from ycharts shows a gradual increase in the number of Ethereum transactions per day, suggesting a bullish sentiment. 

Daily active ERC-20 addresses have been declining since March 24, indicating a decrease in user engagement and transactions. Though, the growth of unique addresses has been steady signifying good fundamentals.

Also worth noting, Ethereum has recently seen a cool-off in trading volumes, indicating weaker interest and liquidity than a month ago. This is a bearish signal, as lower volumes often correlate with potential downward trends.

2. Macroeconomic Factors

The broader macroeconomic environment plays a critical role in shaping the price trajectory of major cryptocurrencies like Ethereum. Current geopolitical tensions and uncertain regulatory environments in the US have resulted in bearish trends in the crypto markets. 

Further, the US Securities and Exchange Commission recently sent Robinhood a Wells notice notifying it that the agency may sue it for selling unregistered securities. A negative regulatory environment particularly hurt the price of Ethereum and other altcoins.

Technical Analysis

1. Support and Resistance Levels

Currently, Ethereum hovers around $3034, with notable resistance at approximately $3600 and $4000, levels that have historically proven difficult for the cryptocurrency to breach.

The support levels are distinctly set around $2800 and $2600. The latter represents a critical threshold that, if broken, could potentially lead to further declines. Conversely, the $2800 mark has demonstrated robust buying interest, suggesting a strong market valuation at this point.

The cryptocurrency embarked on a bullish trajectory starting from November 2023, reaching its peak in March 2024, followed by what appears to be a consolidation phase. This suggests Ethereum may be accumulating energy for another significant price move, dependent on market sentiment and developments within the Ethereum ecosystem.

2. Moving Averages

The latest analysis of Ethereum’s 4-hour trading chart reveals a persistent bearish trend, as the price of Ethereum is consistently below both the 50-period and 200-period moving averages. 

A critical observation from the chart is the occurrence of a "death cross" in late March, where the shorter-term moving average fell below the longer-term moving average. This crossover is widely recognized as a bearish signal, suggesting that short-term momentum is waning at a faster rate than long-term momentum.

Given these conditions, the market outlook for Ethereum remains bearish. Traders might find resistance at these moving averages, posing significant challenges for price recovery.

3. MACD (Moving Average Convergence Divergence)

The MACD and signal line are oscillating close to the zero line, which suggests that there's no strong momentum in either direction for a significant part of the observed period.

The crossings of the MACD line above and below the signal line are frequent, indicating a market with many changes in direction but generally confined within a range.

Recent activity shows the MACD line crossing below the signal line, which is traditionally considered a bearish signal. This suggests that short-term momentum is shifting downwards.

Both the MACD and the signal line are currently below the zero line. This positioning generally indicates bearish conditions or a negative sentiment prevailing in the market.

4. RSI (Relative Strength Index)

The RSI most recently appears to hover around the mid-40s. This indicates a neutral momentum but leaning slightly towards the bearish side as it's closer to the oversold boundary without actually reaching it.

Traders might look for signals of a potential upward movement if the RSI starts approaching closer to 30 and then begins to curve upwards, signaling exhaustion of the selling momentum. Alternatively, a movement towards 50 and beyond might suggest gaining bullish momentum.

6. Fibonacci Retracements

Fibonacci retracement levels are commonly used to identify where support and resistance might occur based on prior price movements. These levels are plotted by taking high and low points on a chart and marking the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 78.6%.

From the chart, it appears the Fibonacci retracement levels are drawn from a swing high of around $4,000 to a swing low of around $2,600.

Near-Term Price Prediction

• Bullish Scenario: If Ethereum maintains support above $3,021 and breaks past the $3,148 mark, there might be a move toward the $3,300 level. Successful breaches of these levels could set up a test of $3,448.

• Bearish Scenario: If Ethereum fails to hold above the $3,021 level, it might retest lower support levels. A drop below $3,021 could see it head towards $2,940, and potentially lower if selling pressure increases.

Long-Term Price Prediction

• Bullish Long-Term Outlook: For a longer bullish trend to establish, Ethereum would need to claim $3,448 as support and attempt to reclaim higher prices towards the original high of around $4,000.

• Bearish Long-Term Outlook: A breakdown below the swing low of $2,600 could significantly dampen bullish sentiment and lead to lower prices.