Ethereum has gained 5.70% over the past three days, but the short-term outlook remains uncertain. A closer look at the on-chain indicators reveals sell signals that hint at an upcoming Ethereum price crash that could fool investors.
Assessing the possibility of an Ethereum price crash
The cryptocurrency market has recorded a significant recovery as Bitcoin recently rose to $622,000. Ethereum followed these cues, rising nearly 6% to $2,444. The demand zone from $2,252 to $2,440 is an important reversal area, but the overall outlook remains uncertain.
ETH/USDT 1 day chart
4 signals that ETH investors should pay attention to
Here are five signals that suggest an Ethereum price crash is near. Investors should be cautious and pay attention to these signs.
Uncertainty is bad for Ethereum
Uncertain macroeconomic policies and the Fed’s decision to cut interest rates by 50 basis points, as well as geopolitical tensions from the Iran-Israel war, are the two main catalysts that could impact ETH. These events impact Bitcoin (BTC), which in turn impacts Ethereum and the broader crypto market.
No ETH buy signal yet
The 365-day Market Value to Realized Value (MVRV) ratio has been hovering around -14%, but this metric dropped to 70% in the last cycle before Ethereum price formed a bottom. This move suggests that it has not capitulated yet and that further collapse in ETH price is possible.
ETH 365 Days MVRV Chart
Whales are not interested in Ether price here
Whale transactions worth more than $100,000 have been trending down from yearly highs. This development suggests that financial institutions are not interested in purchasing ETH at current price levels. Combining this indicator with the above suggests that it would not be surprising if Ethereum price crashes from its current levels.
Further worsening the outlook is the sharp rise in ETH held on exchanges, which is a bearish sign and hints at a potential crash if the situation worsens.
Number of ETH whale transactions
No new capital inflow into Ethereum
Network growth indicators are trending downward, as is the number of whale transactions, indicating that no new funds are flowing into ETH. This indicator also suggests that investors don’t find current prices attractive enough to buy.
Growth of the ETH network
Despite the short-term rally in Bitcoin and the broader crypto market, investors should be cautious about bullish predictions for Ethereum prices. If the Iran-Israel war escalates, it could have a major impact on the stock and cryptocurrency markets. Historically, wars have always been bearish for the stock market, causing major corrections and full-blown reversals.
Frequently asked questions (FAQ)
Key on-chain metrics include 365-day MVRV ratio, whale trades, ETH held on exchanges, network growth, and more.
Whale trading and network growth indicate institutional interest in Ethereum and new capital inflows.
Geopolitical tensions such as the Iran-Israel war can negatively impact Ethereum’s price due to its historical correlation with market corrections and reversals.
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akash girimas
Akash Girimath is an engineer by training with a deep interest in the intricacies of the crypto market. As a senior reporter and analyst, he specializes in crypto analysis and contributes his expertise to prominent platforms such as AMBCrypto and FXStreet. In addition to his analytical work, Akash actively trades cryptocurrencies and manages a small crypto fund for friends and family. His role includes providing insightful market analysis and keeping readers informed about the latest trends in the world of cryptocurrencies. Follow him on Youtube , X and LINKedIn
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
