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Glassnode’s data shows that the number of daily validators exiting the Ethereum (ETH) network recently dropped to the lowest level in 30 days. This decrease was due to a reduced demand for the Proof-of-Stake (PoS) network. This situation led to a lower ETH burn rate, which increased the supply of the token and made it inflationary once again. When ETH becomes inflationary, its price may face significant downward pressure.
Ethereum Network Activity
According to CoinMarketCap, the token’s value dropped by 13% over the past month. Due to the low price movement of ETH, there was no incentive for validators on the Ethereum network to buy back their stakes for future sales. The network usually sees an increase in validator exits when the ETH price rises, which could motivate validators to try to profit from their previously staked coins.
With fewer validators exiting the network, the participation rate among validators also reached the highest level of the past month. Validators need to join the network to ensure Ethereum operates optimally. A high participation rate indicates reliable validator node uptime, fewer missed blocks, and superior block space efficiency. At the time of writing, the participation rate of validators on the network was 99.6%. ETH recorded a 5% increase in value last week, trading at $3,150. This price increase could be due to a slight recovery in bullish sentiment among market participants, based on readings from the cryptocurrency’s basic technical indicators on a daily chart.
Current Data on ETH
For instance, the MACD line of the token was above the signal line at the time of writing. This situation signals that ETH’s short-term moving average is above its long-term moving average. This is viewed as a bullish signal and interpreted as an indicator for taking long positions and exiting short positions. Similarly, the Chaikin Money Flow (CMF), which measures the flow of money into and out of the cryptocurrency market, returned a positive value at the time of writing. This indicates that the ETH market has a stable supply of liquidity.
However, the bearish trend in the market continued. The value of the cryptocurrency’s Elder-Ray Index was -61.96 at the time of writing. This indicator measures the power relationship between buyers and sellers in the market. When its value is negative, bearish forces dominate the market. The negative direction index (red), confirming the strength of ETH bears, was positioned above the positive index. This situation indicates that cryptocurrency sellers in the market outnumber buyers.
