CoinDesk Report:
Despite the price decline of ETH, whales have staked tokens worth millions of dollars. Few indicators and metrics suggest that ETH has been undervalued.
With the cryptocurrency market experiencing a sharp decline last week, Ethereum (ETH), the king of altcoins, also became a victim of significant price adjustments. The price drop may have shaken confidence in the token among many. However, with ETH’s daily chart quickly turning green, there has been a shift in trends over the past few hours.
High Volatility of Ethereum
According to data from CoinMarketCap, ETH’s price has dropped over 12% in just seven days. Assessments by IntoTheBlock data via AMBCrypto also indicate a decrease in ETH’s average balance, attributable to the token’s double-digit price decline.
Simultaneously, Lookonchain tweeted an interesting development. According to their report, as ETH’s value decreased, several whale entities began depositing ETH on Binance. Specifically, three Ethereum whales deposited 28,558 ETH, valued at over $82.2 million. However, shortly after, there was a trend reversal visible on the charts for ETH.
In fact, altcoin prices have risen nearly 3% in the past 24 hours alone. At the time of writing, ETH trades at $2,967.81, with a market cap exceeding $356 billion.
Nevertheless, despite the price increase, trading volume has decreased by double digits. This suggests that ETH may not sustain its bullish momentum in the long term.
Will ETH’s Bull Market Continue?
Other indicators appear equally pessimistic as trading volume.
For instance, despite recording price increases, ETH continues to face selling pressure. This is evident from CryptoQuant’s data, which also highlights an increase in ETH outflows. Simply put, some investors are opting to sell.
However, other indicators support the possibility of a continued upward trend.
For example, ETH’s funding rate has been rising, indicating that bullish traders have been dominant and may be willing to pay shorts. According to CryptoQuant, its Relative Strength Index (RSI) is also in oversold territory. This could potentially increase buying pressure in the coming days, leading to price increases on the charts.
Moreover, analysis by AMBCrypto of Glassnode data shows that Ethereum’s NVT ratio has sharply declined. A decrease in this indicator suggests undervaluation of the asset, typically followed by price increases.
Next, we plan to examine ETH’s daily chart to better understand the expected scenario. We find that ETH’s price has touched the lower limit of the Bollinger Bands, highlighting the potential for a rebound.
Read Ethereum’s price forecast for 2024-25
Additionally, its Money Flow Index (MFI) is also poised to enter oversold territory.
However, the Chaikin Money Flow (CMF) appears bearish, as its value stands at -0.09 as of the time of publication.
