The market for cryptocurrencies is in the viridity today after suddenly plummeting earlier in the week. Bitcoin (BTC) is up about 1.47% today to reach $10,323, while Ethereum (ETH) is down nearly 5.73%, trading around $362. Cryptocurrencies surged higher as the stock markets recouped some of their losses from last week’s pullback.
While the price of ethereum is currently striving to trend upward, cryptocurrency analytics firm Glassnode has noted some of the asset’s on-chain fundamentals that are on a decline. Specifically, the ETH balance on exchanges and also wallet balances are at historic lows.
The big question is, does the slowdown in the growth of these on-chain fundamentals threaten the price of ETH, possibly leading to a deeper sell-off?
Ethereum On-Chain Metrics Are Dropping
According to researchers at Glassnode, the balance of ethereum on exchanges (Id MA) recently slid to a 6-month low of approximately 17,188,000 ETH. This suggests that users are now choosing to hold their coins in cold storage instead of crypto exchanges after the latest sell-off.
#Ethereum $ETH Balance on Exchanges (1d MA) just reached a 6-month low of 17,188,383.432 ETH
Previous 6-month low of 17,194,714.099 ETH was observed on 07 September 2020
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/reta3eE0ui
— glassnode alerts (@glassnodealerts) September 10, 2020
Additionally, Glassnode noted in a separate tweet that the number of ethereum addresses holding 1,000 coins and more has also crashed to a two-year low. According to the analytics firm, this figure currently stands at 7,265 which is a bit lower than the 7,270 posted earlier today.
Previous 2-year low of 7,270 was observed earlier today
View metric:https://t.co/iDNXAbbLRt pic.twitter.com/BcrcoBPbFb
— glassnode alerts (@glassnodealerts) September 10, 2020
The confluence of a decline in on-chain fundamentals could spell trouble for the ethereum price in the near term.
ETH is trading at $362 as of press time. Trader MuroCrypto, however, observed that the second-largest cryptocurrency will remain decisively bearish until it is able to break past the resistance at the $380 region.
“$ETH probably breaks 360 resistance this time. However, there’s EMA cluster and supply zone resistance at 380 levels that will high likely push it back down. Until altcoin market becomes more clear I’m scalping.”
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