It’s been almost 100 days since the Ethereum merger, which has allowed the blockchain to reduce its energy consumption by almost 99%. And while there was a short rally in the ETH price following this, the uptrend was quickly cut off by the collapse of FTX and weak technical indicators. A recent price analysis further shows that Ethereum (ETH) could suffer further in the coming days of 2023.
Ethereum (ETH) price drop?
According to data obtained from CryptoQuant, the number of transactions metric (30-day EMA) has been continuously in a downward trend since May 2021 and recently marked a new low. In general, bearish market phases are usually followed by much less activity from market participants, resulting in a lower number of transactions metric.
Furthermore, as can be seen in the chart, each steep downward trend in the number of transactions metric was accompanied by a substantial drop in prices. This has remained the case throughout the history of Ethereum. Recently, the metric has experienced a sharp drop, which may indicate that there has been a lack of activity. Therefore, it is quite possible that the price will soon experience another significant drop towards the key support level of $1000.
ETH reserves down
The Ethereum Exchange Reserve on-chain indicator also reveals that ETH reserves on centralized exchanges have decreased by more than 30%. As a result, investors are increasing their positions and further decreasing price activity.
Currently, Ethereum is trading at $1,215 with a 4% gain over the past seven days, according to crypto market tracker CoinMarketCap. Even though the crypto community is looking for a relief rally as the new year approaches, prices have barely moved. Many analysts believe that the price of Ethereum (ETH) will continue to fall.