Price Halved, Users at All-Time High…What's Happening with Ethereum?

▲ Ethereum (ETH), decline/AI generated image ©

A 'hidden bullish signal' is being detected in Ethereum, as its price has halved but its users have reached an all-time high.

According to the cryptocurrency media outlet Bitcoinist on April 28 (local time), Ethereum has recently recovered to $2,300 and is attempting to break through the $2,400 resistance. However, analysis by CryptoQuant suggests that the current price does not fully reflect the network's actual demand.

The key indicator is active addresses. Ethereum's 100-day moving average of daily active addresses has reached an all-time high of approximately 587,000. This represents the highest level of network participation in history, not just a simple cycle peak. In contrast, the price is more than 50% lower than its peak in October last year, and the divergence between the two indicators has unprecedentedly widened.

In the past, an increase in active addresses and a rise in price showed a strong positive correlation, but currently, that relationship has significantly diverged. In a typical bear market, both price and network activity decrease, but this time, the opposite trend is observed: network usage is increasing while the price is falling.

This is interpreted as being similar to a situation where a company expands its customer base even during an economic downturn. It is explained that when network demand increases but the price does not follow, prices have historically tended to converge towards catching up with demand in the long term.

Technically, it is still in a transitional phase. Ethereum has rebounded from below $1,800 and is stabilizing around $2,320, but the 50-week and 100-week moving averages are acting as overhead resistance. The 200-week moving average maintains an upward trend, serving as a long-term support level. Analysis suggests that a recovery of the 100-week moving average is needed for an upward reversal.

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