While there have been wide expectations for cryptocurrency to enter into its bull phase, recent on-chain data shows that the demand on the Ethereum network has continued to decline.
The decline in the value of the demands could be highlighted as a sign that could be bearish for the value of the second-largest cryptocurrency by market capitalization.
As per data from CryptoQuant, an on-chain data provider, the “Ethereum transaction count” has experienced a major downfall recently. The transaction count(total) is an indicator that measures the total number of transfers taking place on the Ethereum blockchain on any particular day.
The high Ethereum transaction count values signify traders’ high involvement in the network activities at that instance. Contrarily, the low values imply that the chain is witnessing low activity from traders at that moment.
Below is a chart representing the prevalent trend in the 30-day Exponential Moving Average (EMA) version of the Ethereum transaction count over the last couple of years.
As the graph represents, the 30-day EMA Ethereum transaction count has declined since May last year. Reportedly, in May 2021, Ethereum set its all-time high.
However, the indicator after that has witnessed some transition periods wherein the trend has temporarily reversed. During this phase, the metric climbed up before continuing to follow a downward trajectory.
Analysts observe that these bursts of activity coincided with local tops in the price of cryptocurrencies. This trend also makes sense, as rallies usually require many active traders to be sustainable.
Hence, the uptrends in the indicator’s graph signify a bullish momentum in the asset’s price. At the same time, the downtrends usually represented the value having a bearish fate.
Observation of the most recent trend of the 30-day EMA transaction count has once again experienced a decline signifying that the demand for crypto is still absent from the market. If the recent patterns continue, this decline may also fuel the Ethereum prices plunging down.
At the time of writing, Ethereum is trading at $1,216.89, which is a 0.87% drop over the past day and about a 0.05% decline over the past five days.