Ethereum Struggles Below $3,000 as Address Poisoning Attacks Inflate Network Activity
Ethereum has dropped back to $2,900, down 1.7% in the last 24 hours. This is because the second-largest cryptocurrency is facing more
Quick overview
- Ethereum has dropped to $2,900, down 1.7% in the last 24 hours, contributing to a weekly loss of over 10%.
- Concerns over address poisoning campaigns have emerged, suggesting that recent spikes in network activity may be misleading.
- Institutional capital is fleeing, with significant outflows from spot Ethereum ETFs, reflecting a general risk-off sentiment in the market.
- The future price of Ethereum hinges on maintaining support at $2,880, with potential for further losses if this level is breached.
Ethereum ETH/USD has dropped back to $2,900, down 1.7% in the last 24 hours. This is because the second-largest cryptocurrency is facing more technical problems and doubts about the validity of its recent rise in network activity. The drop adds to ETH’s weekly losses, which are now more than 10%. This is worse than the overall crypto market’s smaller drop.
Address Poisoning Campaigns Cast Shadow Over Mainnet Revival
When daily active addresses on the Ethereum mainnet rose to almost 1.3 million on January 16, exceeding all major Layer-2 networks like Arbitrum, Base, and OP Mainnet, it looked like an optimistic sign at first. Token Terminal called this a “return to mainnet,” which was made possible by the Fusaka upgrade in December that cut gas fees and made transactions on the mainnet profitable again.
But blockchain security experts have found a worrying underlying cause. Cyvers, a well-known security company, informed Cointelegraph that behavioral analysis and statistical correlation clearly suggest that address poisoning assaults are a major cause of the recent spike. Scammers employ fake wallet addresses that seem like real ones to deliver small amounts of money to victims. This tricks them into copying fake addresses during later transactions.
Cyvers experts said, “It’s reasonable to conclude that address poisoning campaigns are having a big impact on the recent rise in Ethereum network activity.” After Fusaka, gas taxes went down, making these kinds of spam attacks possible. This goes against what seemed like natural rise in mainnet acceptance at first. Active addresses have since dropped down to about 945,000 a day, but the news that a lot of the rise was fake has made many less optimistic.
ETH/USD Technical Picture Shows Bearish Momentum Building
Ethereum is at a really important phase from a technological point of view. After falling below the psychologically crucial $3,000 mark, ETH tested support at $2,865 before making a small attempt to recover. The cryptocurrency is currently trading below its 100-hourly Simple Moving Average and all of the major trend indicators.
Bulls need to reclaim the $3,050 level if they want to have any chance of turning the market around. Around $3,050, there is immediate resistance, and the next big barrier is at $3,110, which is the 50% Fibonacci retracement of the current drop from $3,365 to $2,865. If the price goes above $3,175, it might go up to $3,220 and maybe even $3,280.
But if prices don’t stay where they are, there could be another wave of selling. If prices break below $2,880, they could go down to $2,820 or possibly $2,750. The hourly MACD is losing steam in the bearish zone, but the RSI over 50 shows that ETH isn’t quite oversold yet.
Institutional Capital Flees Amid Market Uncertainty
The loss of institutional capital may be the most worrying thing for Ethereum’s short-term future. Spot Ethereum ETFs have seen steady outflows, with daily withdrawals recently hitting $224.8 million. This is a big change from the exuberance that surrounded the launch of these products. It also shows a general “risk-off” mood, as shown by the CMC Fear & Greed Index, which is at 34, firmly in “Fear” zone.
Even though Ethereum is still the most popular tokenized asset, institutions are pulling back. ARK Invest says that Ethereum now has more than $400 billion in on-chain assets. When Layer-2 networks are included, the network has 56% of stablecoins and 66% of tokenized real-world assets.
Ethereum Price Outlook: Defend $2,880 or Face Further Losses
Ethereum’s path in the near future will depend on whether bulls can protect the $2,880 support zone. If the price breaks below this level, it will confirm the bearish trend and possibly speed up selling pressure toward $2,750. On the other hand, a clear return to $3,050 followed by a move above $3,175 would show fresh interest in buying and might start a recovery surge toward $3,300.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save