Ethereum (ETH) Price: Tensions Seen as October Network Activity and Price Action Cools

TLDR:

• Ethereum trading in the $2,500 range indicates weakness in Q4 2024
• Activity metrics reveal that Solana processes 10x more daily addresses than Ethereum
• Bitcoin ETF leads with $66 billion in assets under management, Ethereum leads with $7 billion
• Layer 2 network calls into question Ethereum’s value capture model
• Market technicals point to a possible test of the $2,300 support level

The final quarter of 2024 is putting increasing pressure on Ethereum holders as the cryptocurrency is trading near $2,500, down 5% over the past week. Market data from October 25 reveals ongoing challenges for the blockchain network that pioneered smart contracts.

Price fluctuations are only part of the story. Trading volume has been hovering around $15 billion daily, suggesting active market participation despite the recent pullback towards the $2,800 mark. The price has retreated to a level that tests the support level that has been maintained since August 2024.

Looking under the hood, network activity metrics provide a clear picture. The number of daily active addresses on Ethereum is around 377,000, while competitor Solana handles around 4 million. This stark contrast in network usage has attracted the attention of both market participants and analysts.

The institutional investor landscape adds another layer to the story. The US-based Spot Bitcoin ETF has amassed a staggering $66 billion in assets under management. By comparison, the Ethereum ETF has approximately $7 billion in holdings, indicating a clear preference for financial institutions in the digital asset space.

Ethereum’s role in decentralized finance remains large, with $46.7 billion in total value locked (TVL) in its ecosystem. This represents more than half of the total DeFi market of $87 billion. However, as Layer 2 solutions continue to expand, questions remain about value capture.

Technical traders are noticing a bearish pattern forming on multiple time frames. The weekly chart shows that price is testing the ascending parallel channel that has guided the movement since June 2022. The $2,450 level serves as an important support zone and has acted as both resistance and support over the past three years.

Market sentiment indicators reflect heightened uncertainty. Discussions on social media have highlighted concerns about Ethereum's relationship with layer-2 networks, particularly the distribution of value between the main chain and its scaling solutions. Industry figures point out that Layer 2 may not contribute proportionately to Ethereum’s value proposition.

The ETHBTC trading pair has retreated to levels not seen since March 2016, sparking debate over relative values ​​and investment strategies. Some traders are questioning the benefit of holding ETH, which has higher volatility compared to Bitcoin, especially as the Bitcoin ratio continues to decline.

Daily chart analysis reveals weakening momentum. Recent rally attempts have failed to reach previous resistance levels, but support tests are becoming more frequent. The Relative Strength Index falling below 50 marks a departure from the pattern seen in previous bullish cycles.

Layer 1 competition is increasing as networks like Tron report 2.2 million active addresses in 24 hours. These indicators call into question Ethereum’s status as the dominant smart contract platform, even though Ethereum maintains its leadership in total amount locked.

Infrastructure development continues with Kraken announcing a new layer 2 solution, Ink. This follows similar moves by other large players such as Uniswap, but questions remain as to how these developments will benefit network validators and token holders.

Short-term price action suggests that $2,300 will provide immediate support if current levels are not sustained. The $2,800 level has repeatedly refused to move higher, establishing a clear resistance zone that buyers have yet to overcome.

Technical indicators show mixed signals. While moving average convergence/divergence indicates some positive momentum, other indicators indicate potential weakness. The formation of a bearish candlestick pattern on the higher time frame has attracted the attention of chart analysts.

Despite the price decline, trading volumes remained strong, indicating active market participation rather than panic selling. This suggests orderly repricing rather than capitulation, but sentiment remains bearish.

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