Ethical cryptocurrency's conflicting signs - Selling pressure from bears contrasts with robust on-chain signals
Ethereum, the second-largest cryptocurrency by market capitalisation, has experienced a recent sell-off, but experts believe this could be a short-term correction rather than a sign of a sustained bear market.
The NVT Ratio (with Circulation) for Ethereum has spiked, indicating potential short-term overvaluation. However, if support continues holding, ETH could stabilize before making its next move. The coming days will reveal whether buyers can push Ethereum higher or whether recent sell-offs will trigger a deeper retracement.
Multiple indicators and recent price action suggest a bullish momentum and potential buying opportunity. Ethereum recently broke through a significant 1.5-year resistance level above $4,000 and surged to over $4,300. This breakout typically signals strength and can lead to further price gains.
Technical indicators such as the MACD show a positive crossover, indicating growing buying pressure and a momentum shift favoring buyers. Ethereum’s price is trading above key moving averages, including the 50-week moving average and the 20- and 50-day EMAs, which are commonly used to confirm a bullish trend.
On-chain data shows reduced selling pressure, reflected in persistent outflows from centralized exchanges, suggesting investors are holding rather than selling more aggressively. The price surge follows regulatory clarity and increased demand through ETFs, adding fundamental support to the bullish technical outlook.
Despite some panic selling during a dip below $3,700 and subsequently to about $3,385 earlier in August, the price recovered quickly, indicating that the sell-off was likely short-term and momentum remains positive overall.
If long-term holders continue holding firm, Ethereum could remain resilient and potentially retest the $3,950 resistance with renewed momentum. However, a rejection at $3,950 could open the door to further retracement toward support.
Ethereum's network activity is on the rise, with New Addresses surging 29.94% and Active Addresses climbing 3.17%. Historically, increased address growth provides a strong foundation for price stability and recovery.
Ethereum faces a critical test as record-level sell pressure clashes with improving on-chain trends and strong holder conviction. The MVRV Long/Short Difference for Ethereum remains above 12.36%, suggesting that long-term holders are still sitting on sizable unrealized gains. ETH continued hovering near $3,643, showing that buyers are still absorbing pressure.
Interestingly, 116,000 more ETH were sold than bought in a single day, according to CryptoQuant. Despite this, Ethereum's [ETH] Net Taker Volume plunged to -$418.8 million, its second-largest daily sell-side imbalance ever recorded. Long-term holders' strong conviction despite recent market weakness provides a cushion for Ethereum.
In summary, while Ethereum has experienced a short-term sell-off, the overall trend remains bullish. The current situation is often viewed by traders as a buying opportunity ahead of further price appreciation toward $4,500 and possibly $5,000 in the near term. Ethereum remains at a pivotal point between support and resistance, and rising address activity could offer resilience to Ethereum as it navigates through this critical phase.
- Despite Ethereum's recent sell-off, which experts consider a short-term correction, the NVT Ratio spike suggests potential short-term overvaluation.
- Multiple indicators, including the MACD and technical indicators showing Ethereum trading above key moving averages, point towards a bullish momentum and potential buying opportunity.
- On-chain data shows reduced selling pressure and increased holder conviction, providing a cushion for Ethereum and offering resilience as it faces critical tests.
- The overall trend for Ethereum remains bullish, with traders viewing the current situation as a buying opportunity ahead of further price appreciation towards $4,500 and potentially $5,000 in the near term.
