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Ethereum has seen a considerable decline in recent hours, following Bitcoin's struggle to maintain momentum between $38,000 and $40,000. This situation has caused Ethereum's market dominance to plummet as it struggles to attract buyers around its support levels. Currently, market behavior points to further declines as a crucial on-chain metric shows selling opportunities. As a result, there is a bearish threat to the ETH price as it may register a further decline in the coming hours.
Profitable addresses look for sales opportunities
Recently, Ethereum (ETH) saw a notable price decline from its high of $2,400, now targeting the $2,100 level. This change led to a wave of closings of long positions. According to Coinglass, Ethereum faced total liquidations of over $77 million, with bullish traders contributing around $70 million in liquidations, compared to around $7 million for bearish traders. This trend established stronger resistance near the $2,400 level due to continued bearish pressure.
Still, the potential for an even bigger drop in ETH price looms as a key on-chain metric suggests a correction. Data from IntoTheBlock shows that the market value to realized value ratio (MVRV), an important indicator, indicates a significant selling opportunity for Ethereum, especially with its recent decline towards $2,100.
Currently, the MVRV ratio is 1.49, suggesting that Ethereum's market value far exceeds its realized value, or the value when it last traded. This gap can incentivize traders to make profits by selling their Ethereum holdings.
The price of ETH tends to stabilize around an MVRV of 1.1, which could indicate a potential further decline in its value. Meanwhile, the long/short ratio is showing signs of activity, trading at 1.1993, with 54.5% of positions expecting a price rise and 45.5% expecting a decline.
What’s next for the ETH price?
The bulls' efforts to push Ethereum beyond the $2,400 resistance were met with resistance, as evidenced by a significant decline in the price chart. This led to a sharp drop in the price of Ethereum, falling below its moving averages and is now aiming to fall below $2,100. Currently, ETH is trading at $2,209, down 6.7% from yesterday’s rate.
Ethereum price faces a significant test at $2,100 as it recently fell below the ascending support line. However, buyers continue to defend the price and quickly triggered a rebound above $2,200. Sustaining below this level could strengthen bearish control, potentially taking ETH back to the $2,000-$2,100 support zone. However, notable accumulation could be expected near this level.
Recent price behavior suggests that ETH could fluctuate between $2,100 and $2,400 for some time. However, a break below $2,100 could push the price below the psychological $2,000 level. On the other hand, a bounce and close above the EMA20 trendline could push the price towards $2,400 and then towards $2,700.
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