BTC and ETH funding rates are staying low, even despite the latest price recovery.

After the weekend, despite the price decline, we're observing an increase in active addresses for Ethereum. Will this result in a recovery? Let's see how it plays out.

Ethereum holders are showing an interesting behaviour.

We are tracking 4 groups on the chart above. And all of them have changed behaviour on the latest bottom on July 13.

Especially the group from 1K to 10K ETH, their holdings are decreasing. Of course we can not say it's a real dumping because of a number of liquidity pools and perhaps exchanges in this group. But for sure their balance is decreasing.

10-100 ETH group is slowly but growing.

Small holders 0-10 ETH don't know what to do, doing nothing, probably scared by the latest bottom and still in concerns.

100-1000 ETH holders initially took some profits but then went up again.

And all of them were triggered by July 13 bottom.

There is a special chart layout we're watching daily. It shows the behaviour of different groups of ETH holders, from retail to whales. And it seems that all these groups, all sorts of ETH holders, lost their patience. They don't believe in ETH from current levels. It's called 'A wall of worry'. Those who knows the meaning react accordingly. Betting against the crowd.

Market metrics are indecisive.

Not sure where the market is going, up or down.

Meanwhile there is one group of holders who is betting it will go up:

It's ETH holders from 1k to 10k Ether, owning together close to 12% of total supply.

The possibility of Russia invading Ukraine last week saw increased spikes and prices flip flopping, depending on news that's being churned out.

Which, is also often contradicting, resulting in pretty fearful, uncertain times. Market has responded "Nope, i'm not going to be part of this" as price continues to slide.

Here's an interesting observation by Eugene Ng on Twitter:

Whether it's the market gully, NFT hype dying down or a mix of factors, the average fee to interact with the Ethereum network has slumped to a 3-month low of $13:

At the same time, there's been a noticeble uptick in ETH's daily addresses going hand in hand with the trx fee downslide.

Back during the Oct-Nov rally, both fees and addresses kept climbing as the market was soaring.

Now, we may be seeing a new wave of interest in ETH spurred by low(er) barriers to entry. New addresses interacting with ETH show the same (diverging) pattern:

Early to say, but might be a sign of renewed fundamental strength for the second largest coin?

Ethereum just vaulted by +11% to start the month, breaking above the $3.8k mark for the first time since May 8th.

However, Ethereum's price rally is also accompanied by a massive uptick in average transaction fees, which are hovering at 44(!) USD at the time of writing:

In terms of average trx fees, this makes September 1st the fifth busiest day in the history of the network.

In such conditions, it's not a surprise that the amount of daily addresses interacting with ETH currently sits at 515k, down -35.5% compared to the last time that ETH was at $3.8k:

With exorbitant fees pricing out low-ROI transactions, Ethereum's network activity will likely suffer in the short-term.

Which begs the question - will ETH be able to chart a new price all-time high with sub-optimal fundamentals? This especially as similar spikes in trx fees coincided with short-term price corrections in the past.

Watch this space.