Ethereum, the second-largest cryptocurrency, recently bounced back after hitting a seven-week low. The altcoin king is trading near key levels, but investors remain cautious as signals from the market appear mixed. 

While short-term relief has arrived, uncertainty still clouds Ethereum’s trajectory in the coming sessions.

Ethereum Needs Stronger Support

On-chain data shows new Ethereum addresses are at a two-month low, reflecting weaker network growth. New addresses often indicate the level of market traction, and the decline suggests hesitation among participants. Many investors appear unwilling to commit fresh capital until stronger recovery signs emerge in ETH ($4,059.69).

The fall in new addresses coincided with Ethereum’s price dip, signaling a lack of conviction from potential investors. Without a steady influx of new buyers, Ethereum faces challenges in building sustainable momentum.

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Ethereum New Addresses. Source: Glassnode

Ethereum’s HODL Waves provide insight into investor conviction. The supply held by one to three-month holders has risen by 3% in the last month, climbing from 8.7% to 11.4%. This suggests existing holders are staying confident, riding out volatility instead of contributing to selling pressure.

Such behavior is important for Ethereum’s resilience. When short-term holders mature, they reduce rapid sell-offs and support price stability. This holding pattern could help Ethereum withstand bearish pressure, laying the groundwork for potential recovery once new capital inflows strengthen network participation.

Ethereum HODL Waves. Source: Glassnode

ETH Price Awaits Breach

Ethereum trades at $4,187, just under the $4,222 resistance level after rebounding from a $3,872 low. This recovery highlights buyer interest at support levels. However, the broader market remains cautious, waiting to see whether Ethereum can sustain momentum and reclaim critical price barriers.

If Ethereum breaches $4,222, it could flip this level into support, potentially extending gains. Still, breaking above $4,500 will be difficult without fresh inflows. Limited liquidity and investor hesitation could keep Ethereum rangebound, consolidating until stronger catalysts emerge in the market.

ETH Price Analysis. Source: TradingView

On the downside, failure to maintain support could reignite bearish sentiment. If selling intensifies, Ethereum might slip through $4,074 and retest $3,872. Such a decline would invalidate the bullish outlook.

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