Ethereum Accumulation Addresses See Record Inflows Amid Price Decline and Weak DeFi Activity

• Ethereum has experienced record inflows into accumulation addresses, yet challenges remain as the ETH price hovers around $1,400 amid weak DeFi activity.

• Despite strong accumulation, the overall market sentiment faces headwinds, with a long-term price downtrend posing significant uncertainty for investors.

• “Holders in accumulation addresses are currently underwater, with a realized price of $1,981, indicating the risks of holding at this level,” says a source from COINOTAG.

Ethereum’s accumulation addresses saw record inflows as prices dip to $1,400, yet weak DeFi activity and ongoing downtrends present significant challenges.

Ethereum’s Accumulation Activity: Record Inflows Amid Price Challenges

On April 22, Ethereum recorded a remarkable inflow of 449,000 Ether (ETH) into accumulation addresses, marking the highest single-day inflow in its history. This spike in accumulation activity indicates that long-term holders continue to show optimism about the second-largest cryptocurrency, even as the price fell to around $1,400. The average price at which these inflows occurred was approximately $1,750. This suggests a strong belief in Ethereum’s potential recovery, despite short-term price fluctuations.

Onchain Activity and Market Engagement Analysis

Furthermore, active addresses on Ethereum rose by about 10% between April 20 and April 22, increasing from 306,211 to 336,366. This significant engagement underscores growing interest within the Ethereum network. However, it should be noted that decentralized finance (DeFi) activity through decentralized exchanges (DEXs) continues to present a mixed outlook. Data from DefiLlama shows that DEX transaction volumes have remained relatively stable, averaging around 1.3 million transactions weekly, indicating a lack of momentum within the DeFi sector.

Key Resistance Levels and Technical Analysis for Ethereum

Technical analysis reveals significant resistance around the $1,895 mark, as indicated by the Cost Basis Distribution (CBD) heatmap, which shows that 1.64 million ETH is held at this price level by investors. This concentration could exert selling pressure as many may seek to break even on their investments. Plus, the price currently hovers near the 50-day exponential moving average (EMA) on the daily chart, a key indicator for potential trend reversals. A failure to surpass this resistance could result in continued bearish momentum.

Potential for Price Reversal: Challenges Ahead

Despite positive accumulation activity, Ethereum’s position remains precarious on higher time frame charts. For a genuine recovery to occur, the price must close above $2,142, indicating a break from the prevailing pattern of lower highs and lower lows. Moreover, trader Rektproof cautions that a bearish fractal pattern is emerging, historically leading to price declines. This suggests that Ethereum could retest lower levels below $1,400 if bearish sentiment resurfaces in the market.

Conclusion

In summary, while Ethereum’s accumulation addresses have seen record inflows, signaling long-term confidence, the ongoing weak DeFi activity and significant resistance levels present substantial challenges. Investors should remain cautious as Ethereum navigates its current downtrend, with key technical levels dictating the future price trajectory.