Ethereum's return above $3.000 was a sign of relief for most of the market, as the crackdown on Chinese cryptocurrency transactions led to a market-wide pullback of around 20%. There are several causes behind the Ethereum price action, and the main one is the surge of interest coming from short-term traders.
In the graph provided by the cryptocurrency analysis services, the number of investors who owned ETH for less than a month now hold 43% more funds since July and may even be close to the ATH that the “young portfolios” reached in May.
The number of young portfolios reached 3,8 million addresses with around 20 million ETH. The average retention time for coins in these wallets is 10 days, which means that most bought their Ethereum coins in the fall of September 20, when the price of ETH dropped 12% to below $3.000. Buying power correlates with a strong support zone.
In addition to the data provided, the supply of Ethereum has been deflationary for several days. With a steady reduction in supply, traders and long-term investors are eager to buy a limited supply asset that could rise in price in the future.
Although more buying power of Ethereum appears in the market, we can still see a downtrend for the supply on the exchanges, which indicates that traders or investors are not willing to keep their digital funds on the exchanges. Without constant selling pressure in the market, ETH managed to recover after a sudden crash.
Previously, Ethereum's lead developer Vitalik Buterin released an article describing the upcoming EIP-4337 network update, which will bring new transaction logic to the network and create additional features and possibilities for developers.
