Ethereum (ETH) price just concluded October with an over 7% decline from its opening to closing price.
A second consecutive month in the red, and investors are now wondering whether a hat trick may be on the cards for the bears in November.
On the daily chart, ETH price confirmed that the bearish momentum it experienced in the last week of October had cooled off.
Previous bearish retreats had given way to a bit of recovery. However, ETH price demonstrated limited upside in the last 2 days.
For context, ETH exchanged hands at $3846 at press time, which was less than a 5% rally from its lowest price point last week.
The fact that the bulls did not make a significant comeback after the recent dip made it clear that demand was not quite ready to flood back in.
Despite this, there were signs of accumulation along the way. For example, while ETH price declined between 27 and 30 October, its Money Flow indicator (MFI) still maintained an upward trajectory.
This divergence was synonymous with investors buying on the way down.
Low Address Activity Explains Subdued Ethereum (ETH) Price Recovery
The market concluded October in fear territory as far as sentiment was concerned.
As a result, investors were still uncertain about the next move even though the bears were easing off their assault.
The uncertainty was evident in address activity within the Ethereum ecosystem.
On-chain data revealed that daily active addresses on Ethereum pushed as high as 480,000 addresses in mid-August.
They declined by over 24% to as low as 364,000 addresses as of 26 October.
ETH active addresses registered a slight uptick at the end of October. However, daily active address activity has been cooling down in the last 3 days.
This was indicative of weak network activity as well as demand. In other words, the recent market uncertainty may also point towards what to look for in case market excitement makes a comeback.
Despite these observations, there were a few developments that confirmed that longer-term bullish optimism remained active.
Ethereum Exchange Reserves Drop to 12-Month Lows
Etherum exchange reserves extended their decline to a new 12-month low despite ETH price bearish price action in the last week of October.
This was reassuring for ETH holders because it meant that ETH supply on exchanges was shrinking.
Shrinking supply means ETH may be more susceptible to a supply squeeze. Moreover, it is also indicative of investor confidence because exchange outflows are often associated with long-term HODLing.
As for its performance this month, the subdued demand at the start of November suggests short-term uncertainty remained at the helm.
In other words, ETH and other top coins might require a catalyst to trigger a sentiment shift in favor of a bullish outcome.
In the meantime, the weak Ethereum (ETH) price movement at the start of November may not necessarily seal the cryptocurrency’s fate this month.
The cryptocurrency had a bullish start in October but ended up in the red anyway. That said, Ethereum (ETH) was still one of the dominant blockchain ecosystems.
Recent data has also revealed that it had the highest developer activity across the blockchain landscape.