Ethereum (ETH), like many altcoins, is struggling to maintain its price momentum, with the possibility of entering a prolonged bearish phase looming large. Recent market activity indicates that ETH may be on the verge of leaving what many have considered the enduring phase of the bull market, hinging on critical support levels.
Ethereum Faces Bearish Threat
Six months ago, Ethereum’s Market Value to Realized Value (MVRV) Long/Short Difference hit a yearly high of 55%, an important on-chain indicator that signals whether short-term holders have more unrealized profits than long-term holders. Historically, when the MVRV Long/Short Difference rises, it benefits long-term holders, while a decline, especially into negative territory, indicates mounting bearish pressure.
As of now, the MVRV Long/Short Difference has fallen to 2.08%, suggesting that many long-term ETH holders have already exited profitable positions. If this trend continues and the MVRV enters negative territory, Ethereum could face a prolonged bearish period, similar to the one seen after February 2022, when the market endured a year-long downturn.
Declining Market Sentiment
Another key metric contributing to concerns about Ethereum’s future is the Balance by Time Held indicator. This metric tracks how long participants hold their ETH, and increases generally signal confidence in a bullish trend. However, ETH’s balance held over the past 30 days has risen, suggesting that some holders are losing faith in the altcoin’s short- to long-term prospects. This could indicate a shift in market sentiment, with more investors choosing to sell.
ETH Price Struggles to Maintain Bullish Momentum
The Moving Average Convergence Divergence (MACD) indicator on the daily chart reveals that ETH is currently experiencing bearish momentum. The MACD tracks the momentum of an asset’s price by measuring the difference between the 12-day and 26-day Exponential Moving Averages (EMAs). A positive MACD signals bullish momentum, while a negative reading indicates downward pressure.
Currently, ETH needs to hold above the crucial $2,220 level to avoid a significant price drop. However, given the market’s current state, a fall below $2,000 seems more likely. While consistent buying pressure could help stabilize ETH, the outlook remains uncertain.
In conclusion, Ethereum’s future in this bull cycle hangs in the balance, with key support levels under threat and investor confidence dwindling. Only time will tell if ETH can withstand the bearish momentum or if the altcoin will enter a prolonged period of decline.
Credit: Qerra News
