Ethereum (ETH) price has exceeded $2,500 for the first time since October 1st. But despite growing market optimism, this upward trend may not be as smooth as expected.
In this analysis, BeInCrypto highlights several on-chain indicators that suggest a significant portion of ETH’s gains could be suppressed.
Ethereum is still not without its problems.
Ethereum’s price increase represents a 6% increase in the past 30 days. Within the past 24 hours, the cryptocurrency’s trading volume has increased by 90%, indicating growing investor interest in Ethereum.
Nevertheless, IntoTheBlock data shows that Ethereum coin holding time has decreased by 56% over the past 7 days. Coin holding time indicates the amount of time an investor held a cryptocurrency without selling it.
Typically, a longer holding time indicates a higher chance of price appreciation, while a shorter holding time indicates a potential for price decline. In the case of Ethereum, the recent decrease in holding time suggests that ETH holders are still selling despite the recent price increase.
Read More: How to Buy Ethereum (ETH) with Credit Card: The Complete Guide
Ethereum coin holding time. Source: Into the Block
If this continues, the value of virtual currencies may decline in the short term. The network value-to-transaction (NVT) ratio is another metric that supports drawdowns. A high NVT ratio indicates that the market capitalization is higher than the amount traded on the network.
On the other hand, a low NVT ratio indicates that trading volume is outpacing market capitalization growth. The former is a bearish sign, while the latter is a bullish sign.
According to Glassnode, Ethereum’s NVT ratio has been increasing in recent days, suggesting that ETH’s price may be overvalued compared to current market conditions.
Ethereum NVT ratio. Source: Glassnode
ETH Price Prediction: Likely to fall below $2,400
Looking at the daily chart of ETH/USD, we can see that the average true range (ATR) has remained flat. A low ATR value suggests low volatility and the possibility of a reversal or further expansion.
On the other hand, a high ATR suggests increased volatility and the possibility that prices will continue to rise. With the indicator flattening, it looks like ETH price could fall to $2,345. But that is only the case if the buying pressure decreases and the bears control the direction of the altcoin.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
Ethereum daily price analysis. Source: TradingView
Ethereum price could rise if the bulls ensure that the bears do not take action. In that situation, the value of the cryptocurrency could rise well above $2,600 and reach $2,983.
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. Although BeInCrypto strives for accurate and unbiased reporting, market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions. Please note that our Terms of Use, Privacy Policy, and Disclaimer have been updated.
