Recently, the cryptocurrency market has experienced heightened volatility, and Ethereum (ETH), the second largest crypto token by market value, has not escaped this trend. Consequently, predicting Ethereum’s future price movement has become more challenging due to these market swings. Nevertheless, some key indicators suggest potential directions for ETH’s price once the volatility settles down.
Ethereum Investors Are Bullish
According to Coinglass’s data analysis, the majority of Ethereum investors and speculators remain optimistic about the cryptocurrency, even with its volatile price trends. This is indicated by their persistent actions to buy Ethereum on margin, indicating they anticipate it will increase in value over time.
A trader, despite suffering a loss of $4.5 million while holding Ethereum, showed unwavering optimism towards the second-largest crypto token by acquiring an additional long position and borrowing 17.3 million USDT from Compound to amplify their investment in Ethereum.
It’s impressive that these Ethereum investors remain optimistic, given the significant losses suffered by bulls due to the cryptocurrency’s high volatility. According to Coinglass, a staggering $16 million in long positions were liquidated over the past day, while only $10 million worth of short positions were liquidated during the same time frame.
Currently, information obtained from the market intelligence platform IntoTheBlock reveals that Ethereum’s Market Value to Realized Value (MVRV) ratio has decreased. This finding suggests that numerous Ethereum investors have not yet turned a profit on their holdings. However, this situation could be advantageous for Ethereum’s price as these investors may choose to maintain their positions in expectation of further price increases. Consequently, they will help bolster the asset against potential downturns.
Making A Case For The Bears
Although the derivatives market and Ethereum’s MVRV ratio indicate a positive outlook for Ethereum’s crypto token, the network growth of Ethereum might signal further price drops for ETH. According to Santiment, the number of new users joining the Ethereum ecosystem has decreased noticeably lately.
The Bitcoinist report from recently indicates that Ethereum transaction fees have hit their lowest mark since January. Typically, Ethereum fees surge when there’s high network activity. Consequently, the current low fees suggest that fewer new users are actively transacting on the network or even holding ETH tokens at present.
Despite this setback, there’s good news from Santiment’s data: an uptick in trading activity among existing Ethereum network users, indicated by a rise in velocity. This heightened activity may inject more liquidity into Ethereum, potentially leading to price hikes for the ETH token.
Currently, Ethereum is priced approximately at $3,200 during this writing process, marking an increase within the past 24 hours based on CoinMarketCap’s statistics.
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2024-04-22 19:16