Ethereum underwent significant corrections over the past month and the coveted $400 mark remained untouched. At the time of writing, it was being traded at $347.24 after retesting several support points along the way.
Is the top altcoin losing momentum? Maybe not.
Ethereum’s social volume was in a state of ongoing decline shortly after the cryptocurrency topped out close to $387. The popular blockchain intelligence platform, Santiment revealed that Ethereum was nearing a 6-month low level across social discourse platforms as traders appeared to be “elsewhere” for volatility to trade. However, when the crowds are disinterested, the top crypto-assets such as Ethereum typically witness the biggest buying opportunity.
Rising confidence among Ether’s deep-pocket investors
Ethereum’s influence in leading rallies for its peer altcoins diminished as Bitcoin’s dominance saw a steady incline to 57.9%. Despite the fact that the coin sustained a double-digit price pullback, the number of Ether held by the top 10 non-exchange addresses has increased by approximately 20% to 10.87 million, at press time, from 12.96 million on the 5th of September when the price of the coin fell to $329.
Even during the period of high-sell off which was followed by the price bottoming out to $327 two weeks later, the figures maintained a consistent uptrend. This accumulation during the price drop evidenced that investors were showing confidence in the coin’s long-term prospects.
Thanks to the growing DeFi boom which hints no signs of stopping, this trend is expected to strengthen in the coming days. This was indicative of the fact the top holders were buying the dip in anticipation of a potential price rise.
Users make a comeback, but why now?
One of the main shortcomings of the Ethereum network is its perennial problems of high transaction fees. This exacerbated due to the DeFi explosion and stablecoins growth which, undoubtedly, had a material impact on Ethereum’s economic output. Since then, the market actions have been shaky and despite that, there was rising confidence with respect to market participants returning to Ether which further validated the accumulation trend.
It was not just the whales and miners who drove the accumulation of Ether. Regular users were also found to be returning to the network in response to lower and relatively affordable transaction fees. This can be noted in the above charts compiled by BitInfoCharts which depicted a significant fall in the transaction fee from its all-time high of $14.583 to $2.02, a decline of more than 86% in a period of one month. Still high as compared to its rival blockchains, but considerably low as per Ethereum’s standards.