Posted: December 10, 2024

• Ethereum’s price drops to $3,867 amid increased exchange withdrawals, signaling potential market volatility.
• Active addresses and leverage ratios suggest heightened retail interest and possible short-term market shifts for ETH.

Ethereum [ETH] has seen a notable price adjustment after reaching the $4,000 threshold late last week. At the time of writing, ETH traded at $3,867, marking a 2.2% dip in the past day. 

While the asset remains nearly 30% higher for the month, the drop below $4,000 positions ETH 20.5% away from its all-time high of $4,878, recorded in 2021. 

Despite this correction, market activity surrounding Ethereum offers some compelling insights. According to a CryptoQuant analyst known as Mignolet, there has been a noticeable surge in Ethereum withdrawal transactions from exchanges. 

While some might interpret this as a bearish indicator, Mignolet suggests that it signals the possibility of “increased market volatility.”

The analyst highlights a pattern of heightened activity in Ethereum transactions often correlating with declines in Bitcoin dominance, potentially indicating a broader market pullback as investors take profits.

Key metrics highlight U-turn for Ethereum

Meanwhile, Ethereum’s active addresses, a critical indicator of retail investor interest, have demonstrated an upward trend in recent months.

Data from Coinglass revealed that Ethereum’s active addresses have risen from below 400,000 in early October to surpassing 500,000 as of press time. 

This increase suggests growing participation from smaller, retail-focused investors. A rise in active addresses typically reflects heightened network activity, which can contribute to Ethereum’s price stability and long-term growth.

Another key metric, Ethereum’s estimated leverage ratio, currently stands at 0.487, according to CryptoQuant.

The estimated leverage ratio measures the level of leverage used by traders in the derivatives market, calculated as the ratio of open interest to the total coin balance held on exchanges. 

Read Ethereum’s [ETH] Price Prediction 2024–2025

A higher leverage ratio indicates increased risk-taking, as more traders use borrowed funds to amplify their positions. At its current level, Ethereum’s leverage ratio suggests moderate leverage in the market.

While not excessively high, it highlights the potential for sharper price movements as traders position themselves for future market trends.