Ethereum’s chain activity has been a hit over the past week as geopolitical tensions continue to rattle investors’ trust as it continues to rattle.
The decline in usage raises concerns about further negative side risks for ETH as the second quarter ends.
Ethereum’s on-chain metrics collapse under geopolitical pressures
According to Artemis, the Ethereum network has witnessed a notable decline in user activity over the past week as tensions escalate between Israel, Iran and the US. The daily active address count for Layer 1 (L1) plummeted 26% during that period.
Reduced Ethereum’s daily active address count signal reduced engagement from users and developers on the network. It also suggests that there is less interaction with transaction initiation, contract deployment, or L1’s distributed application (DAPP).
This decline in participation is often ahead of a wider slowdown in network activity, reflected in Ethereum’s transaction count, which is also declining. Each Artemis was soaked 14% during the review period.
The decline in user engagement is reflected by Ethereum’s reduced Defi TVL. At $57 billion at press time, this has plummeted 10% over the past seven days.
The pullback suggests that users are withdrawing funds amid growing uncertainty, avoiding new developments, and limiting liquidity across lending platforms, DEX and staking protocols.
Less trading results in lower demand for ETH, lowering price momentum, contributing to the recent slump in assets.
Ethereum Eyes price and volume surges of $2,569
Amidst a wider market rise, ETH has skyrocketed 8% over the last 24 hours, trading at $2,418 at the time of writing. This price rise is a 7% increase in daily trading volume, currently at $26 billion.
When both prices and trading volumes rise simultaneously, investors’ confidence is increasing and market participation is strengthened. This suggests that true demand, rather than speculative spikes, drives current price increases for ETH.
If this continues, ETH could violate $2,424 and rise to $2,569. A successful break above this price level could send the price of your ETH to $2,745.
However, if sell-off continues, the coins will resume their decline and the price could drop to $2,185.
Disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Although Beincrypto is committed to accurate and unbiased reporting, market conditions are subject to change without notice. Always carry out your research and consult with an expert before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
