Ethereum has been on a roller-coaster, with the second-largest cryptocurrency by market capitalization witnessing a sharp price recoil this week after printing a fresh all-time high of $4,097 mid-last week.
Notably, as of Friday, 22nd March Ether had dropped by roughly 20% signaling a change in momentum. However, on Saturday, the price managed to rebound after a sharp drop on Friday, albeit trading sideways for most of the day on the smaller hourly timeframes.
Notably, the recent price decline coincides with reports indicating a significant surge in the transfer of coins to cryptocurrency exchanges. Late Friday, renowned crypto analyst Ali Martinez highlighted this trend, noting that close to half a million Ethereum had been moved to different cryptocurrency exchanges since the beginning of this month.
“Nearly 420,000 ETH have been sent to crypto exchanges in the last three weeks, worth around $1.47 billion,” tweeted Ali.
Notably, the flood of coins to exchanges has historically led to more selling pressure for Ethereum as investors rush to book profits after a profitable return, outweighing bulls.
Moreover, this trend was also highlighted by analyst Lucas Outumuro, who attributed Ether’s recent drop to FUD meant to divert investor attention to rival coins.
“Ethereum FUD has been growing the last few weeks,” the pundit wrote, adding, “Within crypto, people point to ETH’s price underperforming and traction on Solana as a sign of Ethereum losing its mojo.”
The pundit also highlighted the latest regulatory scrutiny directed towards the Ethereum Foundation by the SEC, with recent reports suggesting that ETH is being targeted as a security. These factors, in addition to the wider crypto market drawdown led by Bitcoin, are believed to be contributing factors to the recent decline in Ethereum’s price.
Nevertheless, despite the recent drop, ETH has shown promising signs for a favourable market as there has been a steady increase in network activity as highlighted by a report from crypto analytics firm IntoTheBlock. Notably, the volume of transactions has been consistently rising, signaling robust engagement within the Ethereum ecosystem.
Furthermore, the report highlighted a notable increase in active addresses as well as increased social media discussions surrounding Ethereum, suggesting growing participation and interest in the crypto asset.
Elsewhere, Santiment reported that whale activity has surged to its highest level in 2024, indicating heightened interest among large investors despite market fluctuations.
As per the firm, Ethereum’s Relative Strength Index (RSI) has also dropped to 28.5, marking its lowest point since the price bottom observed in late January, suggesting a potential opportunity for investors to enter the market.
At press time, Ether was trading at $3,386, reflecting a 0.37% price surge over the past 24 hours, according to CoinMarketCap data.