Reasons Why Ethereum Name Service Price Lags Despite Network Growth

The Ethereum Name Service (ENS) price decreased by 3.4% in the last 24 hours to trade at $26.11 during European business hours on Thursday. The price drop negates the substantial growth ENS is experiencing in network adoption and integration. Can ENS price catch up to its fundamentals?

Ethereum Name Service Price Analysis: Rising Channel Hints 21% Short-Term Gains

Ethereum Name Service (ENS) Price Analysis

ENS price has been trending inside a sizeable rising channel since July 5. Rising channels are famous for breaking out to the downside. The price of ENS also recently broke downward from a short descending channel, reaching the bottom trendline of the rising channel.

The price action of ENS is also trending below the 21-day, 50-day, and 200-day simple moving averages. The 200-day SMA is currently offering some resistance to the asset’s price. A break above this indicator may result in a 4.11% surge that places the ENS price at $26.65, which coincides with a falling trendline acting as resistance. If ENS breaks above this trend line, it may increase by 17% to trade around $31.83.

Data from Santiment shows that altcoins like Ethereum Name Service (ENS) have grown in their networks in the last 24 hours, with 741 new wallets created. However, the ENS price still lags.

Altcoins like Ethereum Name Service (ENS) and Treasure (MAGIC) have erupted in network growth over the past 24 hours, surpassing major milestones. Historically, when projects see these spikes while at a flat price performance, there is an increased chance of a breakout. pic.twitter.com/9Ejnbd2IzW

— Santiment (@santimentfeed) July 10, 2024

Market Speculation Impacts Ethereum Name Service Utility

While ENS provides a valuable service, the token’s utility is currently overshadowed by speculative trading. This is further supported by the Chaikin Money Flow (CMF), which is below the zero line and heading downward. It indicates that the selling pressure on ENS is growing. 

Nevertheless, the ENS Market Value to Realized Value (MVRV) Z-Score is below the zero line, indicating that it may be an opportune time to accumulate ENS as it is undervalued.

General Market Downturn is Pulling ENS Price Down

ENS is part of a bigger market that is greatly influenced by Bitcoin price movements. The recent BTC sell-off affected many cryptocurrencies, including ENS. However, given the robust network growth, a slight market recovery may result in significant price surges for the token.

Besides, the total supply of ENS tokens is capped at 100 million, and their distribution can affect their price. Santiment shows the ENS Gini Index (a measure of the inequality among the values of a frequency distribution) at 0.903, indicating that the ENS distribution among holders is near perfect equality. The risk of whale dumps and sell-offs on ENS is almost 0.

Bottom Line

Despite significant Ethereum Name Service network growth, the ENS token price has not kept pace with these developments. This disconnect between network adoption and token value suggests that other factors, such as market sentiment, may be influencing ENS’s price performance.

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