Ethereum Active Validator Count Hits Year-to-Date Low
The Ethereum Proof-of-Stake (PoS) network has recently seen a significant drop in active validators, reaching a year-to-date low on January 12th, as reported by Glassnode data. This decline in active validators began on January 4th, the same day that the total number of validators voluntarily exiting the network’s validator pool reached an all-time high of 17,821.
Source: Glassnode
ETH Accumulation Persists Among Coin Traders
Despite the decrease in active validators, there has been a persistent accumulation of Ethereum among coin traders. This accumulation suggests that while some validators may be exiting the Ethereum network, there is still strong confidence in the potential of the coin among traders.
Sharp Decline in Ethereum Validator Pool
The trend of declining active validators coincided with Matrixport’s prediction of a potential rejection of all Bitcoin ETF applications by the U.S. Securities and Exchange Commission (SEC). This prediction caused a significant drop in the prices of leading assets, resulting in over $500 million in liquidations. The fear of a market decline may have contributed to the surge in the number of validators leaving the Ethereum network on January 4th.
Source: Glassnode
Impact of Matrixport’s Bitcoin ETF Prediction
The prediction made by Matrixport, a prominent crypto investment services provider, sent shockwaves through the market, causing a spike in the number of validators exiting the Ethereum network. While the daily active validator count has started to rise again, it remains at low levels recorded in December. This suggests that there is still some uncertainty in the market.
Bullish Momentum: ETH Price Rises 15%
Despite the decline in active validators and market uncertainties, Ethereum’s price has been on the rise. At the time of writing, ETH is trading at $2,517, marking a 15% increase in value over the past week. This bullish momentum can be seen in the coin’s momentum indicators, such as the Relative Strength Index (RSI) and Money Flow Index (MFI), which show that buying pressure exceeds sell-offs. However, it is important to note that these indicators also suggest an overheated market and anticipate a minor drawback in ETH’s value.
Source: TradingView
In addition to the RSI and MFI, Ethereum’s Chaikin Money Flow (CMF) remains in an uptrend and is positioned above the zero line, indicating a steady supply of liquidity to sustain a price rally. ETH’s CMF value of 0.16 shows a positive flow of liquidity, further supporting the bullish momentum in the market.
Overall, while the active validator count on Ethereum has hit a year-to-date low, the accumulation of ETH among coin traders and the bullish momentum in its price indicate that there is still confidence in the potential of the coin despite market uncertainties.
Analyst comment
Positive.
As an analyst, the decline in active validators on Ethereum may be a cause for concern in terms of network security. However, the persistent accumulation of ETH among coin traders and the 15% rise in price suggest that there is still confidence in the coin’s potential. The market is currently bullish, supported by positive momentum indicators and a steady supply of liquidity. However, there may be a minor drawback in ETH’s value due to an overheated market.
