Cryptocurrency research firm CryptoQuant said that the recent sharp decline in the number of transactions on the Ethereum chain represents the beginning of lower market demand for the Ethereum network, which also paints a bearish picture for the short-term outlook for Ethereum prices.

Generally speaking, "transaction number" is an indicator that reflects and evaluates the total number of transfers on the Ethereum chain. When this indicator is high, it means traders are active on the network; low values ​​mean there is less activity on the chain.

CryptoQuant analysts published a chart plotting the indicator’s 30-day exponential moving average (EMA) trend:

As shown in the chart above, since Ethereum hit an all-time high in May 2021, Ethereum’s 30-day EMA trading volume has been in an overall decline, and the recent downward trend is more obvious, indicating that the Ethereum blockchain is currently in "low activity" ” status, there is still a lack of demand for Ethereum in the market.

Additionally, Ethereum price has been trading sideways for some time now, and it’s unclear when it will break out of this trend.

This article "bad signals" for Ethereum flashed: Ethereum's transaction volume fell sharply and its activity dropped sharply. It first appeared on Blockchain.