Ethereum[ETH] This week started with a slowdown in the bullish momentum it provided last week. Investors are now leaning toward caution, especially as the market enters another period of uncertainty. The upcoming FOMC meeting may have a lot to do with the current outcome.
Here is the AMBCrypto price prediction for Ethereum [ETH] For 2022-2023
ETH investors are likely to wait for the FOMC meeting. This was because the outcome could determine how interest rate announcements affect market sentiment. Meanwhile, Glassnode’s latest alert revealed that ETH gas fees just hit a four-week low.
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– glassnode alerts (glassnodealerts) October 31, 2022
The lower gas fees observed in the past few hours confirmed the decline in investor trading activity related to Ethereum. The Glassnode Analytics team has also noticed a decrease in the number of Ethereum addresses containing more than 32 ETH. That number has reportedly fallen to a new monthly low. Could these observations indicate a drop in demand for ETH?
The above notes highlight the low demand for ETH in the market. A look at the election headlines confirmed this. For example, ETH addresses between 100 and 1,000 coins dropped significantly over the weekend.
However, the derivatives market demand painted a different picture. The perpetual forward funding rate has fallen slightly after hitting a monthly peak on October 26. This was in particular at the same time that the price of ETH was becoming overbought. It regained the upside a day later and has seen a significant rally since then. The forward funding rate may have acted this way due to the increase in short positions.
Daily active Ethereum addresses have also seen a significant drop over the past four days in line with the return of uncertainty. Network growth picked up last week but has fallen somewhat in recent days.
These observations were in line with the noticeable drop in trading activity over the weekend after last week’s rally. Another possible reason could be that buying pressure decreased a bit when the price pushed into the overbought territory.
ETH price action has seen resistance above the $1600 price level, especially over the past three days. This can be seen as an indication of lower bullish demand, as well as increased selling pressure.
Also, ETH has seen some outflows in the past couple of days after its recent peak. However, the selling was particularly light, indicating that many traders chose to hold on to the possibility of more upside.
Investors who are currently wondering if it is still a good time to buy ETH may want to hold off on this purchase. Uncertainty around the FOMC means we could see a potential sell-off this week, undoing recent gains. The fact that some whales have reduced their stocks also highlights the potential for further price slippage.