The price of Ethereum shows signs of stabilization after a sharp correction. The asset is trading near the $2950 mark. Previously, the price had decreased by 15.6% from January highs. Then, the quotes bounced off a key support zone.
The current market dynamics appear weak. Over the week, the asset's value dropped by 11%. However, several fundamental indicators suggest a possible trend shift. The drop in ‘bearish’ momentum coincided with accumulation of coins by large players. There is also a recovery in network activity. The combination of factors raises questions about the prospects for further price movement.
Technical factors of decline and the reaction of major participants
The weakening of Ethereum's positions was not sudden. From January 6 to January 14, a 'bearish' divergence in RSI formed on the daily chart. The relative strength index showed a lower high against the backdrop of the asset's price increase. Such a technical picture often signals trend exhaustion.
This signal has fully played out. The cryptocurrency has decreased in value by 15.6%. Quotes fell to the support level of $2860. It was in this zone that significant changes occurred. The OBV (On-Balance Volume) indicator formed a higher low from January 20 to January 21. This indicates a weakening of selling pressure. Large buyers began to absorb the supply instead of exiting positions.
Large holders reacted to changes in market conditions. Over the past 24 hours, investor wallet balances have increased. This concerns accounts excluding exchanges. The metric increased from 103.73 million to 104.08 million ETH. The growth amounted to about 350,000 coins in one day.
In monetary terms, this amount exceeds $1.03 billion at the current exchange rate. Market participants did not buy the asset at the peak of its value.
Entry into positions occurred after the impulse was reset and support was tested. The correction was perceived by investors as an opportunity for a profitable purchase.
Recovery of activity in the network and competition with SEI
The technical picture is complemented by fundamental data. As of January 23, Ethereum regained second place in terms of unique addresses (DUA). BNB remains the leader among layer one networks. Such data is provided by analysts at BeInCrypto.
The blockchain surpassed its competitor SEI. Previously, this network showed significant growth due to the development of the gaming segment. At the same time, the second-layer solution opBNB still maintains higher quantitative metrics.
The metric of unique addresses reflects the real use of the network. This is different from purely speculative trading. The return of positions signals a recovery of on-chain activity.
Notably, the price is still below recent highs. In the meantime, Ethereum outpaces all major second-layer ecosystems in terms of address base growth.
Growth of social activity as a leading indicator
The recovery of fundamental metrics was reflected in the information field. The share of mentions of Ethereum in social networks sharply increased. The metric rose from 0.37% to 4.43% compared to the previous day. At one point, the value reached 5.8%.
Historically, spikes in discussions often precede short-term price increases. It was during this period that large investors purchased coins worth over $1 billion.
Let's provide examples from recent statistics:
On January 17, the spike in mentions was accompanied by a subsequent price increase of 2.1%.
On January 21, a similar spike preceded a price increase of 3.4% within a day.
Such correlation does not guarantee a mandatory rally. However, increased interest in the project often leads to positive price dynamics in the short term. Regaining second place in the number of active addresses provides a fundamental basis for increased audience attention.
Key support and resistance levels
The current market structure of Ethereum defines important price zones for traders. Critical support is at the mark of $2860. It was here that the correction of 15.6% ended. At this point, large buyers became active. A breakdown of this level downwards will significantly weaken buyers' positions. This will open the way for a deeper decline in quotes.
To confirm market strength, buyers need to overcome the resistance at $3010. This level is only 2.6% above the current price. A confident consolidation above this mark will shift the focus to $3350. This zone has restrained the growth of the asset since mid-January.
With a successful breakout, the next targets will be the marks $3490 and $3870. However, failure to hold the level $2860 will return the price to around $2770. Such a scenario will effectively cancel the hypothesis of the market recovery beginning.
