Amid the broader market downturn, user activity on the Layer-1 (L1) network Ethereum has plummeted to its year-to-date low. This comes as the value of Ethereum’s native token, ETH, sinks below the $3,000 mark for the first time since November.

With a strengthening bearish sentiment, ETH could extend its price decline in the short term.

Ethereum Sees Decline in User Activity

On February 2, ETH fell to a five-month low of $2,143 before making a slight rebound. While this price dip is part of a broader market decline, a key factor contributing to ETH’s struggles is a reduction in the active addresses on its network. 

According to Glassnode, the daily count of active addresses on the Ethereum network fell to a year-to-date low of 420,346 on February 2. 

A decline in Ethereum’s active addresses suggests reduced user activity on the network, indicating lower transaction volumes and engagement with the decentralized applications on the blockchain.

The drop in demand can weaken ETH’s price momentum, as fewer transactions mean less network utility and a reduced burn rate, making ETH more inflationary. This has been the case for the leading altcoin, whose circulating supply has added 12,066 ETH over the past week. 

According to Ultrasoundmoney, 12,066 ETH, valued above $31 million at current market prices, have been added to the altcoin’s circulating supply in the past seven days. 

When more ETH tokens enter circulation like this, the overall supply available for purchase rises. This typically results in a price drop, especially as the increased supply can exceed demand.

ETH Price Prediction: More Pain Ahead for Coin Holders?

ETH trades at $2,595 at press time, noting a 16% price drop over the past 24 hours. The coin’s negative Balance of Power (BoP) on the daily chart reflects the strong selling pressure. At press time, the indicator stands at -0.38.

The BOP indicator measures the strength of buyers versus sellers by analyzing price movements within a given period. When BOP is negative, sellers have more control, indicating bearish momentum and potential downward pressure on the asset’s price.

If the downtrend continues, ETH’s value could fall to $2,500. If this support level fails to hold, the altcoin’s price could drop further to $2,224.

However, a positive shift in market trends could propel ETH’s price to $2,811.

• Bitcoin fell 4.72% over the weekend and another 3.50% during Monday’s Asian session as tensions driven by Trump’s tariffs have investors derisking their positions.
• Over the weekend, China responded to Trump’s tariffs by indicating interest in imposing tariffs on US goods, while Canada imposed a 25% tariff on CA$155 billion worth of US goods.

Bitcoin tumbled below $100,000 over the weekend, extending losses into today as threats of a possible trade war rock markets worldwide.

While most of Bitcoin’s price decline came this weekend, weakness began when its price failed to swing higher than the $108,000 level two weeks ago (Jan. 20).

A failure to swing higher can signify insufficient buy pressure to push prices higher. If that is the case, prices will seek the next major liquidity level, which could mean lower prices in the interim, as seen over the last two weeks.

Scaling down to a lower time frame, price continued to break lower below $99,000 before retracing to an internal supply zone between the 50.00% and 61.80% Fibonacci levels (the golden zone for retracements) on Thursday, Jan. 30.

After being rejected by internal supply, the price broke down further on Friday, Jan. 31, and over the weekend to settle at the next major demand level, between $92,000 and $96,000.

Bitcoin’s price has found some support at $92,000 and is currently up 4.92% from Asian lows of $91,176.

Wider trade wars stifle markets

Meanwhile, the wider economic landscape faces uncertainty as a brewing trade war between the US and several of its trade partners, including Canada, Mexico, and China rocks various markets.

The US tariffs on its largest trade partners, which include a 25% tariff on imports from Canada and Mexico, and a 10% tariff on Chinese imports have sparked tensions between nations.

In response, Canada imposed a 25% tariff on CA$155 billion worth of US goods, Mexico has announced tariffs on US goods but has not provided details, while China also announced plans to impose retaliatory tariffs on US goods.

The result is uncertainty around the expansion of global trade and a derisking of portfolios, with cryptos being one of the first on the chopping block.

Solana-based meme coin FARTCOIN has steadily declined over the past week. It has shed 31% of its value in the past seven days amid waning demand.

As the bearish sentiment against the meme coin strengthens, FARTCOIN appears poised to extend its decline to a two-month price low.

FARTCOIN Witnesses Weakening Demand

The double-digit decline in FARTCOIN’s value has pushed its price below the 20-day exponential moving average (EMA). At press time, this key moving average forms a dynamic resistance level above FARTCOIN’s price at $1.04. The token would struggle to break above this level if demand continues to plummet. 

An asset’s 20-day EMA measures its average trading price over the past 20 days, giving more weight to recent prices to better reflect short-term trends. When an asset’s price falls below this key moving average, it signals weakening momentum and a bearish shift. This suggests that FARTCOIN’s selling pressure is increasing, and unless demand picks up, the asset could continue declining.

Additionally, FARTCOIN’s falling Relative Strength Index (RSI) reflects the waning buying activity in the market. At press time, its RSI stands at 40.22.

This momentum indicator measures an asset’s oversold and overbought market conditions. It ranges between 0 and 100, with values above 70 suggesting that the asset is overbought and due for a correction. On the other hand, values under 30 indicate that the asset is oversold and may witness a rebound. 

At 40.22, FARTCOIN’s RSI  indicates that the asset is in a bearish zone but not yet oversold, suggesting weakening momentum and increased selling pressure. 

FARTCOIN Price Prediction: Will It Sink or Surge?

Readings from FARTCOIN’s Fibonacci Retracement tool suggest that the Solana-based meme coin risks falling to a two-month low of $0.14 if buying activity remains subdued. The token last traded at this low on December 3.

However, if market sentiment shifts and buyers increase demand for FARTCOIN, they could push its price above the 20-day EMA dynamic resistance at $1.04 and toward $1.13.