Ethereum Price Nears $3,000 as Wallet Growth Hits 2-Year High

The crypto market has experienced intense volatility, with the total market capitalization dropping to $3.44 trillion. 

Amid this downturn, Ethereum (ETH), the second-largest cryptocurrency by market cap, is under pressure, witnessing a price drop of 5% as it approaches the critical $3,000 support level. 

Despite the bearish market conditions, Ethereum’s network activity has shown growth not seen in over two years, according to market intelligence platform Santiment.

Ethereum Network Sees Surge in Wallet Creation

Between January 24 and 25, Ethereum recorded an unprecedented increase in new wallet addresses, with over 206,290 created within 24 hours. Santiment reported this as the largest surge in network growth since October 2022.

The rise in wallet creation coincides with a period of declining prices for Ethereum, which has led to negative sentiment surrounding the cryptocurrency. Despite the challenging market conditions, Ethereum remains a leader in the sector, boasting the highest number of total non-empty addresses in the crypto industry. 

The surge in new addresses is viewed as a potential indicator of growing interest in Ethereum’s decentralized finance (DeFi) ecosystem and staking opportunities.

Ethereum’s Price Drops Below $3,200 Amid Market Liquidations

Over the past 24 hours, Ethereum has experienced a sharp decline, falling 5% to $3,138.56, with intraday trading ranges between $3,343 and $3,024. This price drop has placed Ethereum at a critical juncture, with selling pressure threatening to push prices below the psychological $3,000 mark.

The broader crypto market has also faced substantial liquidations, amounting to $860 million, with $789 million from long positions. 

As a result, Ethereum has come under significant selling pressure. This downward momentum has broken previous support levels, with the price now testing $3,000 after falling below $3,200.

Derivatives Data Reflects Weakening Sentiment

Ethereum’s derivatives market data indicates growing bearish sentiment. Open interest has dropped by 1.29%, standing at $31.23 billion. The long-to-short ratio has fallen to 0.8727, while the funding rate has decreased to 0.0048%. 

These figures suggest a decline in trader confidence and a reduced willingness to maintain long positions.

The Ethereum Foundation’s recent sell-off has also attracted attention. Onchain Lens data shows the foundation sold 100 ETH for 307,893 DAI at an average price of $3,078.93, marking its third sale of the year. 

https://twitter.com/OnchainLens/status/1883807297065082960

Critics have argued that these moves may erode investor confidence, particularly as they coincide with Ethereum’s ongoing price decline.

Bearish Momentum Pressures Ethereum

With Ethereum traded at $3,049, analysts are closely monitoring whether the price will break below the $3,000 support level. The decline has been driven by three consecutive bearish candles, with an 8% intraday drop that has erased gains from earlier trading sessions.

Ethereum continues to face headwinds as market sentiment remains bearish, and traders appear cautious in the current environment.

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