Ethereum's 0.6% Decline to $1,905: Key Insights for Traders

Ethereum's price has seen a slight 0.6% decline over the past 24 hours, dropping from $1,918 to $1,905 at the time of writing. Despite this minor setback, Ethereum remains up 2.1% over the past 7 days. Let's dive into the key metrics and insights from Ethereum's latest price action.

Comparing Ethereum to Bitcoin and Litecoin

Ethereum's 0.6% 24-hour decline contrasts with gains made by Bitcoin and Litecoin over the same period. Bitcoin is up 0.8% in the past 24 hours to $24,413, partially recovering from its recent slide below $24k. Litecoin has seen more significant gains of 5% in the last 24 hours, boosted by growing merchant adoption.

Ethereum's underperformance can potentially be attributed to profit-taking after its surge to 2022 highs at $2,015 last week. Ethereum also faces unique pressure from the ongoing transition to proof-of-stake consensus through the Merge upgrade. Some traders may be waiting on the sidelines until after the Merge is completed successfully.

Technical Analysis and Prediction

Looking at Ethereum's price chart, it has found support above $1,900 over the past few days after its surge above $2,000. The 50-day moving average is sloping upwards and providing dynamic support around $1,828.

The daily RSI is declining but remains above 50, suggesting bullish momentum is intact despite the minor pullback. The MACD histogram bars recently turned negative, foreshadowing the latest dip.

Overall, Ethereum remains in an uptrend on the higher timeframes. However, in the short-term, additional downside to the $1,800-$1,850 area is possible. This key support zone around the 50-day MA could see buying interest emerge before the next leg higher. A break back above $2,000 would confirm the uptrend's resumption.

How Will The Merge Impact Ethereum in The Long Run?

The Merge is one of the most anticipated events in cryptocurrency history. By transitioning Ethereum to a proof-of-stake consensus model, Ethereum will use far less energy and be able to scale more efficiently through technologies like sharding.

However, some analysts warn the Merge could result in price volatility in the short-term as miners exit the network. There are also execution risks around successfully completing such a complex technological transition.

Longer-term, though, reducing supply inflation and energy costs is likely to provide lasting benefits. The ability to stake ETH and earn yield could also increase buying demand. If executed successfully, the Merge could cement Ethereum's position as the leading smart contract blockchain.

What Does On-Chain Data Reveal About Ethereum Holder Behavior?

On-chain data provides valuable insight into Ethereum holder behavior during the latest pullback. According to Glassnode, the number of Ethereum addresses holding 0.01+ coins recently reached a 3-month high of 18.6 million. This suggests that long-term holders are accumulating ETH and remaining confident through the volatility.

Additionally, Ethereum's reserve risk metric remains near its all-time low. This on-chain indicator reflects the confidence long-term holders have in Ethereum's value. Despite the Merge risks ahead, holders appear confident in Ethereum's long-term upside potential.

Overall, analyzing Ethereum's slight 0.6% 24-hour decline in the context of the broader market and on-chain data indicates that the medium and long-term uptrend remains intact. However, traders should watch for a potential pullback to the $1,800-$1,850 zone before upside resumes post-Merge.

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