Ethereum (ETH) is down more than 18% after peaking (ATH) at $ 4,867 on November 10 and is now trading at $ 3,800. That slump did not prevent retail investors from buying and hoarding more, however.
According to data from Glassnode, a blockchain analytics platform, the number of Ether addresses of 0.01 ETH or less hit a record high of 19.95 million in December.
Number of Ethereum addresses with a credit of at least 0.1 ETH | Source: Glassnode
Meanwhile, the number of Ethereum addresses with a balance of at least 0.1 ETH continued to rise from USD 4,867 to USD 3,575 despite Ether’s correction and finally reached a new all-time high of 6.37 million addresses last year.
As a result, the number of processed Ether addresses (balance not equal to zero) reached a new record high of almost 70 million on December 12th. On the other hand, addresses with a little more than or equal to 1 ETH also decline when the price falls, which shows that they are less interested in buying during the ETH declines.
The number of Ethereum addresses held is less than or equal to 1 ETH | Source: Glassnode
Some retail investors buy as the ETH price drops towards confluence support. Notably, Ether fell more than 5% to nearly $ 3,900 on Monday, which helped ETH price attract more buyers.
The first level of support comes from the lower trendline of the descending pattern – the range highlighted in the chart above.
Meanwhile, the purple 100-day moving average (100-day SMA) and the red pullback zone – as has been the case since October 20 – increased the potential of ether and indicated a recovery in the cryptocurrency ETH in the near future.
While smaller private investors amassing Ether, the big players seem to be at odds.
Number of Ethereum addresses with a balance less than or equal to 1,000 ETH | Source: Glassnode
Glassnode data shows a slight recovery in buying interest from Ethereum addresses with a balance of at least 1,000 ETH. Overall, however, this number fell from just under 7,200 to less than 6,350 in 2021.
More and more bullish signals are coming from the decreasing ether balance on all crypto exchanges.
The number of coins held by exchanges has rebounded from nearly 14 million ETH to 14.13 million ETH since Dec. 9 – which coincides with a 10.5% decline – but the long-term trend remains skewed.
The balance of Ethereum on all exchanges versus the ETH price | Source: Glassnode
Lower ETH balances on exchanges suggest traders’ intent to hold coins or place them in DeFi applications for profit instead of trading them.
According to Defi Llama, the total amount of locked assets in all smart contract platforms (TVLs) is at its peak at over $ 250 billion, of which TVL, Ethereum alone is over $ 180 billion.
The total amount of assets locked in the Ethereum ecosystem | Source: Defi Lama
“However, Ethereum’s dominance over DeFi activity suffered a major slump in the second quarter of 2021,” said Delphi Digital, an investment firm focused on digital currencies.
“Over the course of multi-chain history, capital has migrated to other ecosystems such as Solana, Terra and Avalanche.”
High gas fees are the main reason investors are looking for potential “Ethereum killers”.
For example, the fee for a transaction conducted on an Ethereum-based decentralized exchange is $ 70, but it costs only $ 1 on Terra and Solana, although some analysts predict that Ethereum will transition completely from PoW to solve the problem at PoS next year will be high gas charges.
“The price of Ethereum will rise much faster than that of Bitcoin when it switches to the PoS,” predicted Tom Higgins, managing director of the wealth management platform Gold-i.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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