Glassnode’s data reveals that the number of daily validators leaving the Ethereum (ETH) network has recently reached its lowest point in 30 days. This decline is attributed to a decreased demand for the Proof-of-Stake (PoS) network, resulting in a lower ETH burn rate. Consequently, the token’s supply has increased, leading to inflationary conditions. When ETH becomes inflationary, it is likely to experience significant downward pressure on its price.
Ethereum Network Activity
Over the past month, the value of the ETH token has dropped by 13%, as reported by CoinMarketCap. This downward movement in price has discouraged validators on the Ethereum network from repurchasing their stakes for future sales. Typically, when the price of ETH rises, there is an increase in validator exits, as validators aim to profit from their previously staked coins.
With fewer validators leaving the network, the participation rate among validators has reached its highest level in the past month. This high participation rate is crucial for ensuring the optimal operation of Ethereum. It signifies reliable validator node uptime, a reduction in missed blocks, and improved block space efficiency. At present, the participation rate of validators on the network stands at 99.6%. Last week, ETH experienced a 5% increase in value, reaching a trading price of $3,150. This price surge may be attributed to a slight recovery in bullish sentiment among market participants, as indicated by the cryptocurrency’s basic technical indicators on a daily chart.
Current Data on ETH
For example, at the time of writing, the MACD line of ETH was above the signal line. This indicates that the token’s short-term moving average exceeds its long-term moving average. This bullish signal suggests that it may be opportune to take long positions and exit short positions. Similarly, the Chaikin Money Flow (CMF), which measures the flow of money into and out of the cryptocurrency market, displayed a positive value. This suggests that the ETH market possesses a stable supply of liquidity.
However, the market’s bearish trend persists. The value of the cryptocurrency’s Elder-Ray Index at the time of writing was -61.96. This index gauges the power dynamic between buyers and sellers in the market. When its value is negative, it indicates that bearish forces dominate the market. Furthermore, the negative direction index (red), which confirms the strength of ETH bears, was positioned above the positive index. This situation implies that cryptocurrency sellers outnumber buyers in the market.
Disclaimer: The information presented in this article should not be construed as investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and should conduct their own research.
