- The total number failed Ethereum transactions exceeded 500,000.
- ETH’s price craters as network activity dipped.
According to data from CryptoQuantthere was a significant increase in the total number of failed Ethereum[ETH] transactions, to more than 500,000 on May 2.
Source: CryptoQuant
How much are 1,10,100 ETHs worth today?
Following the historical performance of ETH pseudonymous CryptoQuant Analyst MACD, found an interesting one fact. Whenever the total number of failed ETH trades exceeded 200,000, it indicated “market overheating” and was often followed by price corrections.
“In the past, when Ethereum failed trades exceeded 200,000, it showed an overheating of the market and often a price correction.”
Brace yourself for a price correction or not?
In the past month, the price of ETH fluctuated between $2100 and $1800. At the time of writing, the leading altcoin changed hands at $1,869, with its price up 2% in the past 24 hours, data from CoinMarketCap showed.
On-chain assessment of ETH’s performance revealed a decline in network activity since April 14. According to Sanitationthe number of daily active addresses that have since traded the alt fell by 41%.
In addition, the number of new addresses created daily on the ETH network has also dropped sharply. Information from the on-chain data provider revealed the creation of 12,492 new addresses on the ETH network on May 1. This represented an 86% decrease from the 91,560 new addresses created on April 14.
Source: Sentiment
With the continued decline in the number of new and active addresses trading ETH, the value of the coin fell from $2,100 on April 14 to $1,869 at the time of writing.
In addition to a drop in network activity, ETH funding rates fell to a one-month low of -0.013 on May 3. When a crypto asset records negative funding rates, it means that most traders in the market are taking short positions or betting against the asset.
As a result, it is often seen as an indicator of bearish sentiment and sometimes causes an asset’s value to fall.
Source: CryptoQuant
In addition, as the price of ETH fell since mid-April, holders of 1,000 to 100,000 ETH coins gradually distributed their ETH holdings, contributing to the fall in value, according to data from Santiment.
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Interestingly, larger whales, holding between 100,000 and 10,000,000 ETH coins, increased their holdings over the same period. However, with bearish sentiment still lingering in the market, this has not resulted in a significant price rally.
Source: Sentiment
At the time of writing, ETH’s Relative Strength Index (RSI) and Money Flow Index (MFI) were below their respective neutrals, in downtrending positions. This signaled diminishing buying pressure and highlighted the need for fresh demand to drive up the value of the alt.
Source: ETH/USDT on TradingView
