The price of Ethereum has dropped by more than 3% in the past 7 days. A key indicator suggests that Ethereum is undervalued, implying a recovery on the charts.
On June 28th, the price trend of Ethereum (ETH) turned bullish, bringing hope of recovery for investors from previous losses. Unfortunately, this bullish trend did not last long, as the coin soon experienced a price correction, causing both the weekly and daily charts to flash red.
Ethereum faces rejection
Following the above price increase, Ethereum’s shorts once again rose, pushing the price of altcoins down by over 3%. At the time of writing, the trading price of the king of altcoins was $3,391.51, with a market cap exceeding $407 billion.
The worst news is that Ethereum has been excluded from the upper limit of the bull market wedge pattern in recent times. According to a tweet from popular cryptocurrency analyst ZAYK Charts, the token’s price began consolidating within the pattern in late May. A successful breakout could lead to a 30% price increase, potentially pushing Ethereum over $4,000.
Interestingly, a similar pattern appeared earlier in March but broke out in May, causing the altcoin to reach $3,890 on the charts. However, due to Ethereum’s recent rejection, the possibility of history repeating itself may be slim.
Will ETH not recover?
AMBCrypto subsequently closely observed the current state of Ethereum to see if it is unable to break the bull market pattern.
We found that the market sentiment surrounding the king of altcoins remains bearish. Its weighted sentiment has declined slightly after soaring on June 28, proving this point. Its network growth has also seen a slight decline, indicating a decrease in addresses used to transfer tokens.
Nevertheless, some indicators still favor a successful breakout.
For example, the MVRV ratio has improved over the past few days, which can be interpreted as a bullish signal.
AMBCrypto’s assessment of Glassnode data also shows a sharp decline in Ethereum’s NVT ratio. The decrease in this indicator typically indicates undervaluation of the asset, signaling an upcoming price increase.
AMBCrypto then looked at Hyblock Capital’s data to find immediate support and resistance levels.
According to our analysis, it is crucial for ETH to touch and break the $3,500 mark to maintain the bull market, as liquidation volume will increase significantly. Generally, an increase in liquidation often leads to price adjustments on the charts.
Is your investment portfolio green? Check out the ETH profit calculator
On the other hand, if shorts continue to dominate and Ethereum’s volatility rises to the south, it may drop to $3,060.
