Glassnode’s data reveals that the number of validators leaving the Ethereum (ETH) network on a daily basis has recently reached its lowest point in the past 30 days. This decline can be attributed to a decrease in demand for the Proof-of-Stake (PoS) network. As a result, the rate at which ETH is burned has decreased, leading to an increase in the token’s supply and reintroducing inflation. When ETH becomes inflationary, it is likely to experience significant downward pressure on its price.
Ethereum Network Activity
Over the course of the last month, the value of the token has dropped by 13%, according to CoinMarketCap. The lack of significant price movement in ETH has not provided an incentive for validators on the Ethereum network to repurchase their stakes for future sales. Typically, when the price of ETH rises, there is an increase in the number of validators exiting the network, as they seek to profit from their previously staked coins.
With fewer validators leaving the network, the participation rate among validators has reached its highest level in the past month. It is crucial for validators to join the network in order to ensure optimal operation of Ethereum. A high participation rate indicates reliable uptime for validator nodes, fewer missed blocks, and superior efficiency in block space. Currently, the participation rate of validators on the network stands at 99.6%. Last week, ETH experienced a 5% increase in value, trading at $3,150. This rise in price may be attributed to a slight recovery in bullish sentiment among market participants, as indicated by readings from the cryptocurrency’s basic technical indicators on a daily chart.
Current Data on ETH
At the time of writing, the MACD line of the token was above the signal line. This indicates that ETH’s short-term moving average is higher than its long-term moving average. This is considered a bullish signal and suggests taking long positions and exiting short positions. Similarly, the Chaikin Money Flow (CMF), which measures the flow of money into and out of the cryptocurrency market, showed a positive value at the time of writing. This suggests that the ETH market has a stable supply of liquidity.
However, the market’s bearish trend continues. The value of the cryptocurrency’s Elder-Ray Index was -61.96 at the time of writing. This indicator measures the power dynamics between buyers and sellers in the market. A negative value indicates that bearish forces dominate the market. The negative direction index (red), which confirms the strength of ETH bears, was positioned above the positive index. This situation implies that there are more cryptocurrency sellers than buyers in the market.
Disclaimer:
The information presented in this article should not be considered investment advice. Investors should be aware that cryptocurrencies are highly volatile and therefore carry a significant level of risk. It is recommended that investors conduct their own research before making any investment decisions.