Ethereum Holds $2.4K, But Momentum Wanes

Ethereum Reclaims $2,400 Support—A Temporary Rally?

Ethereum (ETH) experienced a recent surge, briefly reclaiming the $2,400 price point. Positive funding rates on Binance and taker buy dominance contributed to this climb, suggesting increased leveraged long positions. However, a closer look reveals signs of weakening momentum.

• Positive Funding Rates & Taker Buy Dominance: Initially supported ETH’s rise above $2,400.
• On-Chain Weakness & Exchange Inflows: Significant ETH inflows into Binance raise concerns about potential profit-taking and a short-term price slowdown.

Analyzing the Price Action

ETH has been trading within a rising channel pattern, bouncing from its lower trendline near $2,195 and consolidating above $2,400. The Relative Strength Index (RSI) remains neutral at 47, indicating neither overbought nor oversold conditions. While this channel historically suggests bullish continuation, buyers need to defend the current support level to avoid a drop below $2,200.

[Insert Image: ETHUSD TradingView Chart]

On-Chain Data Suggests Slowdown

A divergence between ETH’s price and daily active addresses (DAA) indicates weakening on-chain strength. The DAA, previously showing positive spikes, is now retreating. This suggests that network growth isn’t keeping pace with the price increase, potentially limiting sustained bullish momentum. Increased user engagement is needed to solidify the recent price recovery.

[Insert Image: Santiment Chart showing DAA Divergence]

Transaction Activity Decline

Despite the positive technical indicators, Ethereum’s daily transaction count has fallen sharply to 337,000, significantly lower than recent averages. This discrepancy between price action and network usage raises concerns. Unless transactional demand increases, the price rally may be unsustainable.

[Insert Image: Santiment Chart showing Transaction Count]

Aggressive Buyers, But For How Long?

Spot taker Cumulative Volume Delta (CVD) signals show continued buy-side pressure. This points to short-term bullish trends. However, considering the conflicting signals from falling derivatives volume and on-chain metrics, sustained buyer dominance is crucial to avoid a potential price reversal.

[Insert Image: CryptoQuant Chart showing Spot Taker CVD]

Conclusion: A Cautious Outlook

While Ethereum’s recovery above $2,400 demonstrates some market strength, the weakening on-chain metrics and exchange inflows call for caution. Sustained taker demand and a revival in network activity could fuel further upward movement. However, without a resurgence in address growth and transaction volume, price momentum may stall below $2,500.

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