Is Ethereum Facing Threats as $3 Billion in Leverage Grows Ahead of the FOMC?

Ethereum's market is currently experiencing a cooling phase, following a period of highs.

Key Takeaways

Ethereum (ETH) has set a weekly high of $3,400 but recently pulled back 3%.
A notable $3 billion increase in Ethereum's Open Interest (OI) has been observed in just one week, indicating rising speculative liquidity.
New user activity has surged, with a record high of 393,000 new wallets, pointing to strong interest in Ethereum.
Daily transactions for Ethereum reached 2.8 million on January 15, representing a 55% increase from the previous week, illustrating robust network engagement.
The market sentiment remains cautious as macroeconomic factors play a significant role in Ethereum's performance.

Ethereum

The daily analysis indicates that many significant cryptocurrencies are experiencing a pullback. However, this comes after a robust rally at the start of the week, where numerous assets reclaimed important levels for the first time in nearly eight weeks of stagnant movement. In this light, the recent “dip” appears more like a necessary adjustment rather than a cause for concern.

Ethereum (ETH) has also followed this trend. Technically, ETH is down 3% from its weekly high of $3,400, yet it remains up 7% since the week's opening, suggesting that the broader weekly framework is still intact despite the recent downturn.

ETH Source: TradingView (ETH/USDT)

But could it be too early to label this a “healthy” adjustment?

On the derivatives front, speculative liquidity has surged, with nearly $3 billion added to Ethereum’s Open Interest (OI) within just one week. Additionally, the ETH/USDT perpetual contracts on Binance have shown a 60% long skew on average. This creates a noticeable tension between Ethereum's technical robustness and speculative trading. With the upcoming FOMC meeting less than two weeks away, macroeconomic volatility could further impact the situation.

Given these circumstances, is ETH’s 3% pullback merely a minor dip, or could it signify the beginning of a larger decline?

Ethereum's Strength Tested Amid Macro Risks

In today's market landscape, remaining cautious seems prudent. However, Ethereum is making a strong impression. According to Glassnode, there's a noticeable increase in activity from new users, indicating that first-time wallet interactions are on the rise. Moreover, new wallets have reached an all-time high of 393,000.

This surge prompts an important question: What is attracting these new wallets, especially in a climate of ongoing market uncertainty (FUD) and Ethereum's technical fluctuations? The answer appears to be rooted in Ethereum's solid underlying network fundamentals.

Ethereum Source: EtherScan

As illustrated, Ethereum's daily transactions have recently reached a new record.

On January 15th, the network recorded 2.8 million transactions, marking a 55% increase from the previous week. This volume is more than double the usual activity, indicating heightened user engagement and confidence in the network.

The combination of an increase in transactions and the rise in new wallets suggests that ETH's fundamentals are indeed strong. More transactions signify active network use, while an influx of new wallets points to fresh capital flowing into the ecosystem. Together, these factors support Ethereum's price, giving it an advantage even when facing market uncertainties.