Ethereum Name Service Price Prediction: Why ENS Lags Despite Network Growth

The Ethereum Name Service (ENS) price decreased by 3.4% in the last 24 hours to trade at $26.03 during American trading 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

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.

Frequently Asked Questions (FAQs)

1. Why is the ENS price lagging despite network growth?

The ENS price lags due to factors such as market speculation, selling pressure indicated by the Chaikin Money Flow (CMF), and general market downturns influenced by Bitcoin's price movements, overshadowing its network growth.

2. Is now a good time to invest in ENS?

With the Market Value to Realized Value (MVRV) Z-Score indicating ENS is undervalued and the Gini Index showing near-perfect equality in token distribution, it may be an opportune time to accumulate ENS, despite the current price lag.

3. What is ENS?

The Ethereum Name Service (ENS) is a distributed, open, and extensible naming system based on the Ethereum blockchain. ENS aims to map human-readable names, such as "example.eth," to machine-readable identifiers, including Ethereum addresses, other cryptocurrency addresses, content hashes, and metadata. This system simplifies the process of interacting with Ethereum addresses and other resources, making blockchain technology more accessible and user-friendly.

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Evans Karanja

Evans Karanja is a crypto analyst and journalist with a deep focus on blockchain technology, cryptocurrency, and the video gaming industry. His extensive experience includes collaborating with various startups to deliver insightful and high-quality analyses that resonate with their target audiences. As an avid crypto trader and investor, Evans is passionate about the transformative potential of blockchain across diverse sectors. Outside of his professional pursuits, he enjoys playing video games and exploring scenic waterfalls.

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