Ethereum and the broader crypto market continued to show price warning signals after posting short-term gains. However, despite warnings and headwinds, investors and holders continued to bet on Ethereum after The Merge.
In the years leading up to the Ethereum blockchain’s historic shift from consensus Proof-of-Work (PoW) to Proof-of-Stake (PoS), optimistic ETH price expectations were inconclusive. The long-awaited merger took place on September 15, just two days after the release of the US Consumer Price Index, which sent ETH plummeting nearly 20% in the two days leading up to The Merge.
Nonetheless, the network’s on-chain activity has revealed a healthier picture in many areas for the industry’s leading altcoin network.
Investor confidence is on the rise
Recent data from Glassnode revealed that over 11,36,000 validators were added in the month of September alone, indicating growing investor confidence as technical hurdles in The Merge dissipate.
Until mid-September, Ethereum had over 429,000 active validators on the network. In addition, the increased interest from newcomers has also resulted in an increase in the number of new validators on the network. Thus, over the last six months, the number of new validators has increased significantly, both before and after The Merge.
One of the most notable breakthroughs is that approximately 150,000 ETH, worth $195 million, have been staked in the past week. The total value of the ETH 2.0 deposit contract thus reached a high of 13,919,623 ETH.
Growth in institutional activity
The number of large transactions on the Ethereum network – greater than $100,000 – has also seen an upward trend. The number of large transactions is an indicator that serves as a benchmark for the transactions of whales and institutional players.
So, while crypto whales and institutional entities appeared to be returning to the ETH network due to a surge in large transactions, the retail sector saw its momentum slowed due to the asset’s price drop after fusion.
Can we expect a reversal in the trend of the ETH price?
On September 23, the market was finally able to breathe as major crypto assets saw gains on their short-term charts.
ETH price recorded its first green candle on a daily chart at the time of this article’s layout, indicating a positive direction for the industry’s leading altcoin. Moreover, the rise of the RSI from the oversold level is also a sign of reduced pressure from the sellers.
However, a trend reversal remains pending in view of ETH’s 27% decline since The Merge.
Despite notable activity from stakers and crypto whales, ETH still faces several crucial resistance thresholds. An analysis of the Inflows and Outflows indicator notably suggests that Ethereum faces strong resistance at the $1,542 level, where 5.39 million addresses hold over 25 million ETH.
In the short term, if bulls manage to push ETH price past the supply bulwark located at $1,542, the next crucial resistance zone will be at the $2,500 level, where 6.6 million addresses previously bought 22, 5 million ETH.
However, in the event of further headwinds, the price of Ethereum might drop to the $1,200 support level.
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