Ethereum (ETH) Network Growth Reaches 4-Month High, Price Rebound Likely

Key Takeaways

• Ethereum’s (ETH) new addresses reached a four-month high on Sept. 8.
• The ETH price has underperformed against Bitcoin (BTC) since 2021.
• Will Ethereum’s price reflect this growth in network activity?

Ethereum’s (ETH) price has struggled to see meaningful momentum in 2024. While it started the year on a positive note, reaching a new yearly high of $4,090 in March, the price has fallen since and is approaching the yearly open at $2,283.

ETH bounced on Aug. 5, but despite this increase, it still struggles to regain its footing and trails most of its competitors in 2024.

Can ETH regain its footing and start playing catch-up, or will it resume its downward trend? Let’s find out!

Ethereum Sees Network Growth

On Sept. 8, the number of new Ethereum wallets  reached 126,210, the highest level since May 5. The increased growth is a positive sign of future trends.

When using a 7-day moving average of new addresses, it is clear that the number has been growing since September 2022, with two small retracements during this time.

The aforementioned increase seems to have broken a downward trend that has been ongoing since May 2024.

However, this upward movement was not reflected in the price of ETH, which increased only incrementally on Sept. 8.

What Analysts Are Saying?

A well-known analyst on the social media platform X, @CryptoMichNL, believes  that ETH is due to outperform Bitcoin because of the bullish divergences that have been developing during the recent decline. He also suggests that the underperformance results from the Jump Trading selling spree and predicts an upward movement of 15 to 32%.

On top of the bullish divergence in the 12-hour time frame, longer-term divergences are at play. The weekly chart shows that the RSI has generated bullish divergence since Oct. 2023. The price is also at a confluence of support levels created by:

• A descending parallel channel
• The ₿0.042 horizontal support level
• The 0.618 Fibonacci retracement

However, it is worth mentioning that several other bullish divergences (dashed) only led to small upward movements instead of full-blown trend reversals. Also, the ETH price has been trending downward for the past 1,008 days, so it is safe to say that the trend is still bearish, and a huge catalyst will be needed to begin a reversal.

Future Outlook for ETH/USD

The ETH/USD chart also gives similar readings. While the price is trending downward, it also bounced at a long-term horizontal support area at $2,300. Once it did, it created a long lower wick, considered a sign of buying pressure.

Similarly to ETH/BTC, the price of ETH is decreasing inside a descending parallel channel, implying the movement is corrective.

However, the RSI and MACD give clear bearish readings. Both are below their bearish thresholds and are trending downward.

So, while the price action can be considered bullish if ETH does not close below $2,300, technical indicators are decisively bearish.

ETH Faces Uncertain Future

There are some positive signs for Ethereum, such as its network growth and price action above an important support level. However, the ETH/USD, especially the ETH/BTC pair, are mired in long-term downtrends and need to bounce considerably to entertain the possibility of a trend reversal.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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