• Ethereum’s price action reveals a classic bullish inverted head-and-shoulders pattern, signaling potential upside despite mixed network activity indicators.

• Recent declines in Ethereum gas usage and a negative MVRV Long/Short Difference suggest cautious sentiment among long-term holders, contrasting with short-term profit-taking.

• According to COINOTAG analytics, the divergence between wallet growth and active addresses highlights early-stage interest but weak conviction in the market.

Ethereum forms a bullish structure amid declining gas usage and mixed MVRV signals, indicating cautious optimism as price hovers near key resistance.

Ethereum’s Bullish Inverted Head-and-Shoulders Pattern Signals Potential Breakout

Ethereum (ETH) is currently exhibiting a textbook inverted head-and-shoulders pattern on its daily chart, spanning from early March through mid-June. This formation is characterized by higher lows and a horizontal neckline resistance near $2,824. The pattern typically forecasts a bullish breakout, with Fibonacci extension targets at $2,933 and $3,237. However, for this bullish scenario to materialize, ETH must decisively close above the neckline with strong momentum. The current price action, hovering around $2,512 and maintaining support above $2,383, reflects a market in consolidation, poised for a potential directional shift.

Source: TradingView

Investor Wallet Behavior Reflects Mixed Confidence Levels

Analyzing Ethereum wallet distribution reveals nuanced investor sentiment. Long-term holders have maintained stable wallet counts over the past month, indicating a neutral stance among large-scale investors. Conversely, investor-level wallets have increased by 6.46%, suggesting moderate confidence from mid-tier participants. Retail wallet concentration remains nearly unchanged at +0.21%, signaling hesitation among smaller investors. This steady distribution implies that ETH supply is tightly held, potentially compressing volatility until a decisive market move occurs. A significant shift in wallet concentration could serve as a catalyst for either bullish or bearish momentum.

Source: IntoTheBlock

Ethereum MVRV Ratios Highlight Divergent Market Positioning

The Market Value to Realized Value (MVRV) ratio for Ethereum currently stands at 23.05%, indicating that recent buyers are generally in profit. However, the MVRV Long/Short Difference remains negative at -7.71%, reflecting that long-term holders are still below their average cost basis. This divergence creates a psychological tension in the market: short-term holders exhibit optimism, potentially driving rallies, while long-term holders act as stabilizing anchors during extended trends. For ETH to break out of its current range, these metrics ideally need to converge with upward momentum, signaling unified market confidence.

Source: Santiment

Declining Gas Usage Raises Questions on Ethereum Network Activity

Ethereum’s gas usage has recently dropped by approximately 16%, falling from over 65 billion to 55.06 billion. This decline marks the end of a sustained period of elevated network activity and may indicate either enhanced network efficiency or a reduction in on-chain demand. While this decrease has not yet disrupted price dynamics, it prompts scrutiny regarding the network’s health and user engagement. Should gas consumption continue to wane alongside decreasing active addresses, the bullish outlook could weaken. Conversely, if this represents a temporary cooldown, it may precede renewed transactional growth.

Source: Santiment

Wallet Growth vs. Active Addresses: Early Interest but Limited Engagement

In the past week, Ethereum has seen a 9.77% increase in new wallet creation, signaling growing interest from new participants. However, active addresses have declined by 1.35%, indicating that daily engagement is not keeping pace with wallet growth. This divergence is typical during early recovery phases, where curiosity precedes sustained participation. A synchronized rise in both metrics would strengthen the foundation for a bullish trend. Currently, this pattern underscores cautious optimism and supports the view of ETH trading within a range-bound environment.

Source: IntoTheBlock

Ethereum’s Price Outlook Hinges on Breaking $2,824 Resistance

Ethereum’s current technical setup is promising, with a well-defined bullish pattern suggesting potential upside. However, conflicting on-chain indicators such as declining gas usage and mixed wallet activity warrant caution. Until these metrics align with the technical structure, ETH is likely to remain range-bound. A decisive breakout above the $2,824 neckline, supported by increased network engagement and positive valuation shifts, could catalyze a strong upward move. Traders and investors should monitor these key levels and on-chain signals closely to gauge the next directional phase.

Conclusion

Ethereum stands at a critical juncture, balancing between a bullish technical pattern and mixed fundamental signals. The inverted head-and-shoulders formation offers a clear breakout target, but network activity and valuation metrics reflect cautious market sentiment. For sustained upward momentum, ETH must overcome the $2,824 resistance with robust volume and improved on-chain engagement. Until then, the market is likely to experience sideways movement, emphasizing the importance of monitoring both price action and underlying network health for informed decision-making.