Ethereum (ETH) is showing signs of life with a 6% price increase over the past month, fueled by a 90% surge in trading volume within the last 24 hours. However, new data suggests the rally could be short-lived as certain on-chain metrics highlight potential risks to ETH’s sustained growth.
ETH Holders Cashing Out?
One troubling metric comes from IntoTheBlock, revealing that Ethereum’s Coin Holding Time has dropped by 56% over the past week. This metric measures the duration investors hold their ETH without selling, and its decline signals that more holders are offloading their assets despite the price gains.
Typically, longer holding times correlate with price stability or upward movement, while shorter holding times often reflect investors’ hesitation or anticipation of a price drop. The recent decline hints that selling pressure could drive ETH’s value lower if the trend persists.
The Network Value to Transaction (NVT) ratio also casts doubt on Ethereum’s upward momentum. A rising NVT ratio indicates that Ethereum’s market cap is outpacing transaction activity—a bearish sign suggesting overvaluation. Conversely, when transaction volumes grow faster than market cap, the ratio drops, signaling bullish momentum.
Data from Glassnode shows that Ethereum’s NVT ratio has increased in recent days, underscoring concerns that ETH’s recent rally might not be supported by strong fundamentals.
ETH Price Forecast – Heading Below $2,400?
A look at the ETH/USD daily chart presents further clues about potential price movements. The Average True Range (ATR), which measures market volatility, has remained flat, indicating a lack of significant momentum. Flat ATR readings suggest that ETH could consolidate further or experience a downward reversal if bulls fail to maintain buying pressure.
Analysts suggest that if bearish sentiment takes over, ETH could drop to $2,345. However, if buyers regain control, Ethereum might surge past $2,600, potentially hitting $2,983 in an optimistic scenario.
Caution Ahead for ETH Bulls
While Ethereum’s recent price spike is encouraging, on-chain data hints at underlying market hesitations. With declining holding times and an elevated NVT ratio, investors should brace for potential volatility. A critical battle between bulls and bears lies ahead—one that will determine whether ETH consolidates or breaks out toward new highs.
As Ethereum sits at a crossroads, the next few days could be pivotal for its future price direction. Will buyers step up to push the altcoin above $2,600, or will bearish forces drag ETH below $2,400? Only time will tell.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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