THE crypto market has been plagued by increased volatility of late, with the second largest crypto token by market capitalization, Ethereum (ETH), not exempt. This has made it more difficult to determine Ethereum's future trajectory. However, there are some metrics that indicate which direction the ETH price could take once this volatility subsides.
Ethereum investors are optimistic
Data of Coinglass shows that most Ethereum investors and traders are still bullish on the crypto token despite recent price fluctuations. Specifically, most of these traders have continued to open long positions on Ethereum, meaning they are betting on significant upside in the long term.
The bullish sentiment towards Ethereum is highlighted by a trader who, after losing $4.5 million longing for ETH, continues to do so. open another long position on the second largest crypto token. This crypto-whale went so far as to borrow 17.3 million USDT from Compound just to increase its position on Ethereum.
These investors' optimism towards Ethereum is even more laudable, given that it is the bulls who have suffered the most from ETH's high volatility. Data from Coinglass shows that more than $16 million in long positions were liquidated in the last 24 hours, compared to $10 million in short positions liquidated during that period.
In the meantime, data from the market intelligence platform In the block shows that Ethereum Market Value to Realized Value (MVRV) The ratio has fallen, indicating that many Ethereum holders are not yet making profits. This could be bullish for the ETH price, as these holders will likely hold their position in anticipation of further price increases, providing support against any potential price declines.
Advocating for bears
While derivatives market activity and Ethereum's MVRV ratio hint at a bullish outlook for the crypto token, Ethereum's activity network growth suggests that ETH could still see further price declines. Data from Santiment shows that the rate at which new users enter the Ethereum ecosystem has slowed recently.
This decline network growth is also evident in a recent Bitcoinist report, which note that Ethereum fees fell to their lowest level since January. Ethereum Fees are known to spike when there is increased activity on the network. Therefore, low fees mean fewer new users are in progress of transaction on the network or even hold the ETH token.
However, the positive side is that data de Santiment also shows an increase in speed, suggesting that existing users on the network are actively trading and injecting more liquidity into the Ethereum ecosystem. This factor could also contribute to possible price increases of the ETH token.
At the time of writing, Ethereum is trading at around $3,200, which is up over the past 24 hours, according to data from CoinMarketCap.
ETH bears pull price below $3,200 | Source: ETHUSD on Tradingview.com
Featured image from Token Information, chart from Tradingview.com
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