Key Takeaways
- Despite Ethereum’s major AI push, ETH has plummeted 13%.
- Price action shows potential recovery if ETH holds the $4,100 level.
- Ethereum reserves dropped by 583k ETH, hinting at ongoing accumulation.
Ethereum’s major AI push with the launch of the new dAI appears to be failing to generate optimism, as the native token ETH continues to decline. Recently, Davide Crapis, the AI Lead, shared a bold development by the Ethereum Foundation aimed at positioning Ethereum as the preferred settlement and coordination layer for AI and the machine economy.
Inside Ethereum’s dAI Initiative
In the report, Caprio shared that his team will focus on two major areas. The first is an AI economy on Ethereum, which will enable AI agents and robots to pay, coordinate, and follow rules without intermediaries.
The second is a Decentralized AI Stack, designed to ensure that the future of AI does not rely solely on a handful of entities, but instead offers open, verifiable, and censorship-resistant alternatives.
The team lead stated that Ethereum makes AI more trustworthy, while AI makes Ethereum more useful. Additionally, the team will continue working on ERC-8004, a standard designed to verify the identity and trustworthiness of AI agents.
Despite these bold developments by the Ethereum Foundation, ETH has been under pressure for the past 10 days, continuing its decline. Since the dAI team’s announcement, the asset has tumbled more than 13% and has reached a key support level of $4,100.
Current Price Momentum
As of now, ETH price is trading near $4,190, up 0.25% over the past 24 hours. However, investor and trader participation remains lower compared to the previous day, resulting in a 32% drop in trading volume during the same period.
Ethereum Price Action and Technical Analysis
TimesCrypto’s technical analysis reveals that ETH’s current level is a strong support level, which previously acted as resistance. Over the past one and a half months, the asset has touched this level twice, and each time it recorded an impressive price jump.
Based on the daily chart, if ETH holds this support level, history could repeat itself, and the price may see an upside jump of up to 15%, reaching the $4,865 level. On the other hand, if this momentum fades and the price continues to decline, the asset could fall to the $3,850 level.
However, technical indicator Supertrend still holds in green and is hovering below the asset price, which suggests that the asset is in an uptrend. But the Average Directional Index (ADX), which holds a value of 17.75, hints at a weak trend strength, meaning the current rally may lack strong momentum unless buying pressure increases.
Ethereum Exchange Reserve Drops by 583K ETH
The current momentum appears to be driven by whales and institutions, as ETH exchange reserves have fallen significantly over the past week. Data from the on-chain analytics tool CryptoQuant reveals that exchange reserves have dropped by 583k ETH.
This indicates that whales and institutions have withdrawn a substantial amount of ETH from exchanges over the last week, likely following a buy-the-dip strategy.
