11.4 C
Manchester
June 15, 2024
BTC Hunts
Image default
Altcoin

Ethereum Could Trigger A Major Liquidation While Testing Crucial Support! Here’s ETH Price’s Next Move

The post Ethereum Could Trigger A Major Liquidation While Testing Crucial Support! Here’s ETH Price’s Next Move appeared first on Coinpedia Fintech News

Despite Ethereum’s (ETH) significant price increases towards $2,100, triggered by BlackRock’s application for a spot ETH ETF, there is growing concern about a potential profit-taking downturn as the price approaches a critical support line. Market analysts observe that investors who initiated long positions during the recent price rally are showing signs of impatience as the bullish momentum for ETH fades. Consequently, a drop below this support line could bring a substantial sell-off in the market.

Ethereum’s NVT Ratio Still Favors Bulls

Over the last 24 hours, there has been a significant long liquidation after the ETH price failed to hold its momentum near $2,100. As a result, long-position holders liquidated over $7.2 million worth of positions as the price went against their bullish bets. 

However, there’s a bullish hope that might prevent a sudden decline as the NVT ratio still favors the bulls. Data from IntoTheBlock reveals that the NVT ratio (Network Value to Transaction) has been dropping over the past few days. 

The “NVT ratio” serves as a metric comparing Ethereum’s market capitalization with its transaction volume. A high NVT ratio indicates that Ethereum’s market value significantly surpasses its network’s coin transaction capacity. 

This difference could imply that the altcoin is currently overvalued. Conversely, a low NVT ratio suggests that Ethereum might be undervalued, as it denotes a relatively high transaction volume on the blockchain in comparison to its market cap. 

The ratio has decreased from a peak of 66.91 to a current low of 47, indicating that as increasing numbers of holders engage in ETH transactions, the price of ETH is becoming more affordable.

Interestingly, the long/short ratio currently trades at 0.99. This closely contested scenario reflects a nearly even split, with 49.8% of positions being long and 50.2% being short, highlighting a tough war in the market. 

What’s Next For ETH Price?

Ether recently bounced back from the key $2020 mark, suggesting that bulls are attempting to establish this level as a new support. However, bulls continue to struggle to hold momentum above $2,100. As of writing, ETH price trades at $2,054, declining over 0.5% from yesterday’s rate. 

The buyers are gearing up for another push to breach the $2,200 barrier. If successful, the ETH price could gain significant momentum and potentially surge towards the $2,453 mark. Another push will send the price toward $3,000, especially since there’s no major resistance in that range.

On the flip side, the bears are preparing to strongly defend the $2,200 level. A reversal from this point could lead to a period of consolidation for the price, oscillating between $2,000 and $2,100. A negative shift in the short-term trend could be triggered if the price not only falls below $2,000 but also stays below it. Under such a situation, the price might plummet toward the 200-day Exponential Moving Average (EMA), currently at $1,860.

Related posts

Ethereum in Red Zone As Bulls Retreat: Is $2,000 a Distant Dream for ETH Price?

Leslie Kim

Why Is Cardano The Worst Performer? Is The Hype Around ADA Price Dead?

Leslie Kim

Altcoin Season Is Here: Top 6 Picks To Watch For Massive Profits!

Leslie Kim