Ethereum Price Drops 9% Despite High Network Activity

• Ethereum’s monthly average active addresses dropped, while its price failed to shoot up.
• The number of ETH wallets in loss reached a seven-month high of 42,602,870.333.
• Investors in funds and trusts have relatively weak buying sentiment for ETH.

Ethereum’s Network Activity

Ethereum [ETH] witnessed a decline in its network activity as the blockchain’s monthly average active addresses dropped. This could be taken as a bearish signal as the price of ETH continued to remain bearish.

Drop In ETH Price

According to CoinMarketCap , Ethereum was down by more than 9% in the last seven days, reflecting its sluggish behavior. At the time of writing, it was trading at $1,670.05 with a market capitalization of over $200 billion. The price drop had a major impact on investors’ portfolios.

ETH Addresses In Loss

As per Glassnode Alerts’ tweet, the number of ETH addresses in loss reached a seven-month high of 42,602,870.333. This indicated that many holders were selling off their holdings or moving them elsewhere due to weak buying sentiment for ETH investments such as Grayscale Funds and Trusts investments.

Layer-2 Popularity

While Ethereum’s network activity declined, Layer-2s like Base Optimism (OP) and rollups gained popularity among market participants due to their scalability features offered by Coinbase’s L2 Base bridge which accounted for $155 million out of the total $251 million within days after launch.

Conclusion

Ethereum’s reluctance to push its price up may not be solely due to less network activity but other factors such as weak buying sentiment from investors and layer 2 scalability options being favored over traditional blockchain transactions may be contributing factors as well .