Ethereum Remains Strong Above $1,700 Amid Mixed Signals and ETF Trends

Ethereum (ETH) is stable above $1,700 but faces mixed long-term outlooks. Recent record accumulation of ETH in long-term wallets signals confidence among investors, despite many holding assets underwater. Network activity has improved slightly with a rise in active addresses, but DeFi engagement remains low. Additionally, network fees have dropped to historic lows, indicating demand concerns as institutional interest softens amidst ETF trends.

Ethereum (ETH) is managing to keep its head afloat above $1,700, a small victory after a rough patch recently. But the outlook isn’t clear cut; while some technical signs hint at a potential recovery, fundamental metrics raise a few red flags about the future growth of the Ethereum ecosystem. Investors are certainly weighing these signals carefully.

In an unprecedented move, we saw 449,000 ETH—worth around $785 million—flow into long-term holder wallets on April 22. This marks the highest daily influx ever recorded into accumulation addresses. It’s a bold show of faith from investors, even though many of them are currently facing losses since ETH’s realized price sits at $1,981. Historically, such a situation is unusual, as realized prices typically lag behind market values, a trend since as far back as 2018.

On the bright side, Ethereum’s network is buzzing again, evidenced by a nearly 10% rise in active addresses from April 20-22—from 306,211 to 336,366. This uptick suggests a burgeoning interest correlating with that recent price bounce. Yet, there’s a concerning trend in decentralized finance (DeFi), the sector that was once Ethereum’s crown jewel. Weekly transaction numbers remain stagnant at about 1.3 million, indicating this crucial area is somewhat lacking in drive, as DEX volumes continue their downward trajectory.

Meanwhile, the drop in Ethereum’s network fees, now hovering at five-year lows between $0.16 and $0.31 per transaction, is raising eyebrows. Such a steep decline points to a significant dip in demand for block space. According to Brian Quinlivan from Santiment, this drop signals fewer users sending ETH and engaging with smart contracts. With the burn mechanism struggling to offset the newly minted ETH from staking rewards, the overall decrease in fees has created a rather inflationary atmosphere for Ethereum.

When it comes to price resistance, Ethereum encounters strong overhead pressure at $1,895, where roughly 1.64 million ETH were acquired by investors back in November 2024. This concentration means selling pressure is inevitable if holders look to break even or secure profits following recent declines. Keeping an eye on the 50-day exponential moving average (EMA) will be crucial; failure to breach this threshold could mean continuing bearish trends, while a successful breakout might just pave the way for recovery.

Some traders are keeping an eye on potential bearish fractal patterns that, if they materialise, could signal another drop, possibly below $1,400, especially if the general market sentiment turns sour. It’s a tricky situation for sure.

To add another layer of complexity, institutional interest in Ethereum appears to be waning. US-listed spot Ether ETFs reported net outflows of $10 million between April 21-23, diverging sharply from Bitcoin ETFs, which enjoyed record inflows during the same period. Meanwhile, investors in rival networks like Solana and XRP are still optimistic about potential spot ETF approvals in the US, possibly diverting institutional attention away from Ethereum.

In summary, while Ethereum’s price may bounce back temporarily, several underlying factors could affect its medium- to long-term prospects. Investors remain vigilant, paying close attention to both technical and fundamental signs as they navigate this challenging landscape.