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Ethereum

Ethereum price flashes multiple sell signs after setting up fresh highs

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  • Ethereum price looks at a steep decline after setting up a new all-time high at $2,800.
  • Multiple technical, social and on-chain indicators suggest a short-term sell-off is near.
  • A sustained buying pressure leading to a higher high above $2,800 would invalidate the bearish thesis.

Ethereum price has been on a tear after the recent market crashes. While the pioneer cryptocurrency moves sideways, ETH has shattered its ceiling and set up new all-time highs. However, this drastic increase in its market value could lead to a minor pullback.

Ethereum price eyes correction

On the 12-hour chart, Ethereum price shows two crucial technical formations that suggest a bearish outlook, the spinning top candle and the Momentum Reversal Indicator’s (MRI) cycle top signal.

Both these signs are indicative of bullish exhaustion, which often leads to a correction.

A bearish spinning top candlestick is a technical formation that contains long wicks and a short body that closes below its opening price. This pattern is formed at the top of an upswing and forecasts a reversal.

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Adding credence to this bearish outlook is the MRI’s cycle top flashed in the form of a red ‘one’ candlestick. Such a setup projects that a one-to-four candlestick correction could ensue.

The stable support barrier at $2,546.8 is the first line of defense for this sell-off. A breach of this would allow the bears to target the 50 Simple Moving Average (SMA) on the 12-hour chart that coincides with another crucial demand level at $2,312.3.

The horizontal trend lines at $2,371.2 and $2,253.4 act as a buffer zone, present above and below the said target. Here ETH bulls could potentially rescue the smart contract token and kick-start an upswing.

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ETH/USD 12-hour chart

ETH/USD 12-hour chart

An increase in the number of daily active addresses interacting with the Ethereum blockchain is bullish and can be considered as a proxy of investor interest in ETH at the current price levels. However, the contrary of it also holds true.

At press time, not only is ETH price increasing, but the number of daily addresses has dropped 7.1% from 700,000 to 650,000 since April 21, portraying a bearish divergence and suggesting that a decline in price might follow.

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ETH price and daily active addresses chart

ETH price and daily active addresses chart

Adding headwind to ETH buyers is Santiment’s 30-day MVRV model, which shows that 19.3% of the investors who purchased Ether in the past month are experiencing profits.

A similar bump in MVRV was seen in early April, which eventually led to a decline as market participants rushed to book profits.

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History reveals that a spike in social volume usually occurs at price tops. Therefore, the recent 61% bump in this metric is bearish from a counter-sentiment perspective and adds credence to the correction thesis mentioned above.

ETH 30-day MVRV and social volume chart

ETH 30-day MVRV and social volume chart

The only arsenal in the buyers’ corner is the diminishing supply of ETH held on exchanges. This value has dropped 16.3 million to 13.7 million since the beginning of 2021. Such a sharp collapse causes a negative supply shock and could potentially increase Ethereum price.

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ETH held on exchanges chart

ETH held on exchanges chart

While everything seems to be bearish for the second-largest cryptocurrency (by market cap) in the world, investors should consider the possibility of ETH price defying technical and on-chain indications due to the current bull run.

If Ethereum price creates a higher high above $2,810, it will invalidate the bearish scenario and kick-start a bullish one.

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In such a case, market participants can expect the pioneer altcoin to surge to $2,842.

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Ethereum

One Ethereum Competitor Is Showing Strength As Bitcoin Loses Ground, According to Crypto Trader Benjamin Cowen

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Crypto analyst Benjamin Cowen says an Ethereum rival is showing strength as Bitcoin pulls back from its all-time high.

Cowen tells his 576,000 YouTube subscribers that AVAX, the native token for the smart contract platform Avalanche, is “weathering the storm relatively well.”ADVERTISEMENT

The 12th-ranked asset by market cap is trading at $68.28 at time of writing, up over 5% in the past 24 hours and more than 20% in the past week, according to CoinGecko.

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Cowen notes that AVAX is trading well above both its 20-week simple moving average (SMA) and 21-week exponential moving average (EMA). Taken together, the two metrics are what Cowen refers to as the “bull market support band.”

“We also have some wiggle room in the sense that we are above the bull market support band of the AVAX/USD valuation. The 20-week SMA is at $35.85 and the 21-week EMA is at $43.47. What that tells you is that Avalanche has been performing pretty well for the last several weeks. 

A lot of coins are right above their bull market support band, and they haven’t been performing as well recently. A lot of these things can have some type of seasonality as the money ball just jumps around from project to project, and right now, clearly, AVAX is showing a decent amount of strength.” 

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Cowen doesn’t predict that AVAX will have a strong move against Bitcoin “in the next month or so,” but he does say that Avalanche can increase in value in terms of its relationship to the US dollar in the short term.

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Ethereum

Ethereum Price Forecast: ETH bulls set sights on new record high targeting $6,000

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  • Ethereum price is gearing up for a new all-time high as two significant bullish chart patterns have transpired.
  • The governing technical patterns present optimistic targets at $6,015 and $6,365.
  • A daily close above $3,960 would add credence to the bulls’ aspirations toward $6,000.

Ethereum price is hovering around a key support level which has previously acted as resistance for ETH, as the bulls catch their breath before the token resumes its rally. As long as the second-largest cryptocurrency by market capitalization holds above $3,960, a 60% surge is still on the radar. 

Ethereum price eyes 60% ascent

Ethereum price has printed two major bullish technical patterns on the daily chart, an ascending parallel channel and a cup-and-handle pattern. The former chart pattern indicates that ETH has been consistently reaching higher highs and higher lows since mid-June, presenting an optimistic outlook for the token.

Based on the first prevailing chart pattern, ETH is likely to tag the upper boundary of the channel at $6,015, coinciding with the 161.8% Fibonacci extension level, representing a 48% climb.

The cup-and-handle chart pattern suggests that the projected target for Ethereum price is at $6,365, forecasting a 60% rally. While the two governing technical patterns establish an optimistic outlook for ETH, the token may be confronted by a headwind at its all-time high at $4,369, corresponding to the middle boundary of the parallel channel.

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Additional hurdles may emerge at the 127.2% Fibonacci extension level at $5,092, then at the 161.8% Fibonacci extension level at $6,015. 

Given the reinforcement of the two optimistic chart patterns presented on the ETH daily chart, retracements for Ethereum price may not be significant even if selling pressure arises. 

ETHUSDT

ETH/USDT daily chart

Ethereum price will discover immediate support at the support trend line at $3,960, then at the 78.6% Fibonacci retracement level at $3,797. The following line of defense will emerge at the 21-day Simple Moving Average (SMA) at $3,710, then at the 50-day SMA at $3,453 before eventually dropping toward the lower boundary of the ascending parallel channel at $3,349, which meets the 61.8% Fibonacci retracement level.

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If Ethereum price fails to hold above the aforementioned levels of support, the bullish outlook may be voided, prompting ETH to plunge lower toward the 100-day SMA at $3,137.

ETH bulls should aim for a daily close above $3,960 to reinforce commitment for the bullish target to be on the horizon.

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NFTs

Whales hoarding NFTs? 80% of Ethereum NFTs bought by only 17% of Addresses

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  • Around 16 percent of addresses snatched up 80.98 percent of all NFTs on Ethereum between April and September.
  • Moostream argues that there is still room in the NFT space for ‘small investors.’ 

Moonstream, the open-source blockchain analytics platform, has revealed that about 80 percent of all non-fungible tokens (NFTs) on the Ethereum blockchain between April 1 and September 25 were owned by a minority of wallets. According to the October 21 report, four-fifths of NFTs in that time period was owned by 17 percent of wallets.

The reported analysed data from 7,020,950 million NFT transactions on Ethereum in a period of close to six months. It revealed that a significant number (80.98 percent) of NFTs on the blockchain were owned by whales, NFT platforms and exchanges which make up 16.71 percent of all wallets. The rest were distributed amongst the remaining 83.29 percent. This trend seems to follow the Pareto Principle or 80/20 rule as pointed out by one Reddit user. This is a principle that asserts that 80 percent of consequences are as a result of 20 percent of the causes.

It is worth noting that the data used in the report is based exclusively on the Ethereum blockchain and not Layer 2 networks or centralised Application Programming Interfaces (APIs). The report explains this in it’s ‘Caveats’ section.

The Ethereum NFTs dataset is constructed purely from events on the Ethereum blockchain. It does not include any data from Layer 2 networks like Polygon. Nor does it include any data from centralized APIs like the OpenSea API. It does not account for events or data from any non-ERC721 smart contracts associated with these platforms on the Ethereum blockchain. This means that two parties could exchange a positive amount of funds for a transfer off-chain and conduct the transfer on-chain and we would not be able to distinguish the transfer from a gift. It is also possible for a single transaction to involve multiple NFT transfers.

Still early for ‘small-time’ investors and individuals?

While the unevenness in NFT distribution is glaringly obvious, Moonstream insists that there is still room for participation from small investors.

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What this data shows us is that the Ethereum NFT market is open in the sense the vast majority of its participants are small-time purchasers who likely make their purchases manually. There are few barriers to entry for those who wish to participate in this market.

Contrary to what many may believe, purchasing and holding NFTs is relatively easy. Individuals can open a wallet on an NFT marketplace and fund it. After this, they can easily bid on available NFTs. Some popular NFT marketplaces are OpenSea, Rarible and Foundation.

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