Ethereum, transaction volume plummets by 1 million...Can it recover $2,300?

▲ Ethereum (ETH)

Ethereum (ETH) is attempting to recover $2,300, but slowing network activity and a sharp drop in staking inflows are weighing on its price rebound. While the number of active addresses has increased, the actual number of transactions has decreased, indicating a trend where on-chain utility is not supporting price recovery.

FXStreet reported on May 14 (local time) that Ethereum's network activity has weakened over the past week, even as it attempts to recover above $2,300. According to the article, Ethereum's price moved around $2,290, and the number of active addresses recently increased again after a decline in the previous week.

However, the increase in active addresses did not translate into an expansion of actual usage. The number of transactions, which indicates the scale of blockchain user activity, sharply dropped by approximately 1 million over the past week, only to recover slightly in recent days. FXStreet pointed out that if an increased active user base does not lead to an increase in transaction volume, it means the network remains quiet.

Staking metrics also showed weakness. Ethereum staking inflows decreased by over 80% in the past week, and the total staking volume also dropped by approximately 100,000 ETH to 39.01 million ETH. This was presented as a sign that participation in Ethereum's Proof-of-Stake is contracting.

Discussions about reducing staking rewards are also affecting investor sentiment. Zach Pandl, Head of Research at Grayscale, proposed a method to pay rewards only to ETH staked up to a certain level to reduce net issuance and increase scarcity. FXStreet also reported that Ethereum has been under selling pressure amid recent increases in exchange deposits and ETF outflows.

Short-term volatility has increased in the derivatives market. Ethereum recorded liquidations totaling $43.8 million in the last 24 hours, with short position liquidations accounting for a larger portion at $23.4 million. This indicates that some bearish bets were closed out as the price experienced a limited rebound.

Technically, Ethereum has secured short-term support by recovering above its 50-day exponential moving average (EMA) of approximately $2,274. However, it remains below the 20-day EMA of about $2,306 and the 100-day EMA of approximately $2,351, indicating that overhead selling pressure persists. The Relative Strength Index (RSI) remained around 49, and the Stochastic Oscillator moved towards the oversold zone, suggesting weakening bullish pressure.

In case of a decline, the primary support level is the 50-day EMA, followed by $2,211 and $2,108 as key defense lines. If further declines deepen, $1,909 and $1,741 were mentioned as broader structural support zones. Conversely, to confirm an upward reversal, Ethereum needs to break through the resistance levels of $2,306, $2,351, and $2,389 on a daily closing basis; only by surpassing this range could a recovery potential open up to the $2,746 resistance zone.

Ethereum is currently caught between conflicting trends: an attempt to recover $2,300 and slowing network activity. While the price is holding above the 50-day EMA, a combination of decreasing transaction volume, a sharp drop in staking inflows, and ETF outflows suggests it remains in a limited recovery trend rather than a strong rebound.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*