Ethereum sees sell-offs amid drop in transaction volume

While Ethereum maintains its grip above the $1,600 price level, these metrics suggest a mixed outlook. On-chain transaction and trading volumes have experienced significant declines since their peak last November.

Notably, Ethereum’s on-chain volume has plummeted to a current value of 4.77 billion. Similarly, transaction volume has dropped to a 9-month low of 333,990 ETH, translating to $566.48 million. This follows a recent decline in whale activity.

Santiment noted that this reduction in utility isn’t necessarily alarming, but it indicates waning trader interest during a period of uncertainty surrounding Ethereum’s valuation around the $1,650 mark.

Key players, notably large holders of 10 to 10,000 ETH, have contributed to this dynamic. Over the past four months, these holders have actively offloaded their assets, reversing their earlier accumulation trend. 

These sell-offs coincided with ETH’s recent one-year high of $2,120. As a result, market watchers have attributed the distribution campaign to a surge of profit-taking trades. These addresses only hold 26.91% of the total ETH supply at the reporting time.

However, this trend does not definitively suggest a decline in ETH’s prospects. Whales’ actions might not directly dictate price trajectories, Santiment says. 

Interestingly, Ethereum’s development team remains committed and active amid the profit-taking trades and declining investor interest, with ongoing improvements and innovation. Development activity on the network has been moderately high.

Meanwhile, ETH holds above the $1,600 territory despite the distribution trend. Like the rest of the market, Ethereum has continued to trade within a range over the past week, with only a 1.25% drop. The asset is changing hands at $1,646 at the time of writing.

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