Ethereum and the larger market continued to see red signals in terms of price after seeing short-term gains. However, despite cautionary tales and price headwinds, stakers and holders continued to build the Ethereum castle after the merger.
In the years leading up to the Ethereum blockchain’s historic shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS), the optimistic price expectations failed to pan out. The much-anticipated merger went live on September 15th – just two days after US CPI data pulled ETH’s price down by close to 20% in the two days leading up to the merger.
Nonetheless, on-chain activity pointed towards a healthier picture in quite a few areas for the top altcoin network.
Increasing investor confidence
Recent Glassnode data showed that over 11,36,000 validators have come online in September alone, indicating growing investor confidence as the technical challenges of the merger were ironed out.
Until mid-September, Ethereum had over 429.6K active validators on the network. In addition, increased interest from newcomers was also seen in the increasing number of new validators on the network. During the last 6 months, the gradient of new validators has increased significantly in the run-up to and after the merger.
One of the most notable developments was that approximately 150.00 ETH, worth $195 million, was staked in the past week. This caused the total value in the ETH 2.0 deposit contract to reach an ATH of 13,919,623 ETH.
Institutional activity is picking up
The number of large transactions on the Ethereum network, greater than $100,000, was on an upward trend. The number of large transactions is an indicator that acts as a proxy for the number of whale and institutional players’ transactions.
While whales and institutional entities appeared to circle back to the network as large transactions increased, retail still saw reduced momentum due to the post-merger price pullback.
Can a reversal be expected?
On September 23, the market finally breathed a sigh of relief as top crypto assets saw some gains on short-term charts.
The ETH price charted its first green candle on a daily chart at press time, pointing in a positive direction for the top altcoin. In addition, RSI’s rise from oversold also pointed to a diminishing pressure on the sell side.
However, there were still questions about the reversal of ETH’s 27% price pullback since the merger.
Despite the sparkling activity from stakers and whales, ETH still faced some key resistance barriers going forward. A look at the In and Out of Money indicator suggested that Ethereum faced stiff resistance at the $1,542 mark where 5.39 million addresses hold over 25 million ETH.
In the short term, if bulls can push the ETH price to break through the supply wall at $1,542, the next crucial area of resistance will be at $2,500, where 6.6 million addresses had previously bought 22.5 million ETH.
However, in the event of another headwind, ETH’s price could drop to the $1,200 support level.
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