As the cryptocurrency market struggles with yet another red wave, the second-largest cryptocurrency, Ethereum (ETH), is registering a sharp decline in the number of new addresses created each day, indicating a potential price correction
Ever since the software upgrade known as the merge, the price of Ethereum has had trouble maintaining key support levels. Similarly, the bullish trend has reversed, but on-chain data shows that large amounts of investors are actively pulling out their wallets. Due to dwindling buyer interest, a return of $2,000 may remain a dream in the near future.
More pain ahead for ETH?
Analyst Ali Martinez published a chart that, in his opinion, demonstrates the possibility of a significant price decline for any particular blockchain. This time, the much-anticipated Merge upgrade has just been implemented on Ethereum, the second-largest DLT platform.
Martinez’s graph shows that there has been a sharp drop in the daily number of new Ethereum wallets created during the past 24 hours. This represents a drop of about 50% overall.
According to the analyst, if the number of new wallets established on any blockchain declines, a significant price drop is typically imminent.
Earlier, it was reported in the media that SEC Chairman Gary Gensler stated that Ethereum is subject to US law, making it subject to the application of security legislation. Should the second largest cryptocurrency be treated as a security, holders of ETH would be subject to reporting directly to the SEC and related taxation.
However, this revelation by Gensler might lead to a significant exodus of Ethereum from centralized exchanges, particularly those based in the US like Coinbase, Bittrex, etc.
Ethereum is currently down 1.17% on the day and 1.1% over the past seven days and is currently trading at $1,337.
