ETH could offer a bullish relief after retesting this important level
- ETH bulls might regain control after the price drops to the 0.786 Fibonacci level.
- Federal Reserve’s interest rate announcement adds a layer of uncertainty.
In the last two weeks, we observed as ETH bears brought the price down. This week the market has so far slid lower, and notably to a level where we may yet again start to see the return of some bullish momentum.
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ETH exchanged hands at $1,852 at press time and its current range may act as a pivot range. This is because the recent sell pressure pushed the price down to an important consolidation zone. More importantly, the same price zone sits on the 0.786 Fibonacci retracement line.
ETH has already bounced back at least two times from the same Fibonacci level. This suggested that we might see a bit of accumulation taking place at the same level. Note that it is near the 50% Relative Strength Index (RSI) level which suggests that there is likely to be directional uncertainty, as has been the case recently.
The Money Flow Index’s (MFI) dip, then sideways action adds to the uncertainty. On-chain data also revealed that Ethereum’s transaction count was down to its lowest level in the last four weeks.
As such, the network growth has also tanked to a monthly low. This reflected the lower transaction count on the network, in line with the observed slowdown in the market.
Assessing whether ETH demand is building up
Glassnode’s latest data revealed that Ethereum’s median gas usage is now at a four-month high. We usually see higher gas fees during periods when the network experiences more demand, and usually as prices go higher. Does this mean that demand is resuming?
Previous 4-month high of 49,805.327 was observed on 24 July 2023
— glassnode alerts (@glassnodealerts) July 25, 2023
The metric is a contradiction to the previously mentioned slowdown in network usage. However, it could point towards a recovery. A look at ETH’s supply distribution does confirm that demand for cryptocurrency has been gradually improving.
According to ETH’s supply distribution metric, addresses holding between 100,000 and 1 million ETH leveled out between 21 and 23 July, followed by a pivot. This category (denoted in yellow) controlled 15.26% of ETH’s circulating supply at press time.
Although some whales have been accumulating, it is worth noting that others were still selling. Especially those holding between 1,000 and 100,000 ETH. This means there was still significant sell pressure at press time.
How many are 1,10,100 ETHs worth today
ETH’s low demand and prevailing sell pressure might be due to the fact that investors were still leaning more on the side of caution. This is because the Federal Reserve will announce the next interest rate decision which may determine if the market will crash or kick start another bullish move.