After reaching a record high of $4,867 on Nov. 10th, Ethereum’s native token Ether has fallen by more than 18%. It is now trading at $3,900. The plunge has not stopped retail investors from purchasing the token in small amounts.
Glassnode, a blockchain analytics platform, has data that shows the number of Ether addresses with less than or equal 0.01 ETH hit a record high of 19.95M on Dec. 4. This was the day ETH fell to as low $3,575 (data source: Coinbase).
Ethereum addresses that have balances lower than or equal 0.01 Glassnode
Despite Ether’s correction of $4,867 and $3,575, the number of Ethereum wallets that had balances at least 0.01 ETH continued to rise, eventually reaching a record of 6.37 million on December 12.
On Dec. 12, the number of Ether addresses that have a balance above zero reached an all-time high of almost 70 million. However, the prices dropped along with addresses that held less than 1 ETH, indicating that they are less interested in Ether’s sessional dips.
Ethereum addresses that have balances less or equal to 1 Ethereum Glassnode
Do you want to jump ahead?
As Ether prices fall towards a support confluence, the retail investors who bought Ether in small amounts continue to march ahead.
Ether fell by more than 5% Monday to $3,900, in an impulsive selloff sparked by similar corrections in the cryptocurrency space. ETH prices reached an area that is attracting buyers recently.
Daily price chart for ETH/USD featuring Support Confluence. Source: TradingView
The lower trendline of Ether’s descending channel pattern, the blacked area in the chart above, provided the first support. The purpled 100-day simple moving Average (100-day SMA), and the red pullback area, which has been there since Oct. 20, raised Ether’s potential for a retracement upward in the short term.
Although Ether seems to be accumulating in smaller retail investors, larger ones seem more conflicted.
Ethereum addresses that have balances below or equal to 1000 ETH. Glassnode
Glassnode data, for instance, shows a slight recovery in buying interest by Ethereum wallets with balances at least 1,000 ETH. Their numbers are still down overall from close to 7,200 to just below 6,350 by 2021.
Balances of Ether in Exchanges
There are more upside cues from Ether’s falling balances across all crypto exchanges.
Although the number of coins in exchanges has recovered from almost 14 million ETH down to 14.13 million ETH Dec. 9, which coincided with a nearly 10.50% drop in price, its long-term trend is still to the downside.
Ethereum balance on all exchanges versus ETH prices Source: Glassnode
The lower ETH balance on different exchanges indicates that traders intend to hold their coins, or stake them in DeFi projects to earn yields.
Similar: Data shows that pro traders are more bullish about Bitcoin than they were in the past
According to data from Defi Llama (from which Ethereum’s TVL was over $180 billion), DeFi’s total worth locked (TVL), is at an all-time record high of $250 billion.
Total capital locked across all of the Ethereum ecosystem. Source: Defi Llama
“But, Ethereum’s dominance of DeFi activity took a big hit H2 2021,” said Delphi Digital, a crypto focused investment firm.
“Capital has moved to ecosystems such as Terra, Solana and Avalanche as the multi-chain narrative plays.”
Investors are looking for potential “Ethereum killers” because of high gas prices.
A decentralized exchange swap costs $1 on Terra and Solana for $70, while it costs $70 on Ethereum. However, some analysts believe that Ethereum’s complete transition from proof of work to proof-of stake next year will solve the high gas problem.
According to Tom Higgins (CEO at Gold-i, an asset management platform, Ethereum’s value will go up much faster than Bitcoin due to the transition to proof-of-stake), Tom Higgins said that Ethereum’s price would rise at a faster rate than Bitcoin because of the move to Proof-of-Stake.
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