Recent market indicators for Ethereum suggest significant upside potential, demonstrating resilience in volatility. Dormant ETH has become active again, supporting bullish sentiment and indicating rising investor interest. Driven by increased trading activity and strong support levels, it is expected to rise to $4000.
Market sentiment and technical indicators
MVRV ratio: an important indicator for understanding Ethereum's market dynamics, assessing holder profitability and determining entry points for new investors.
The current 30-day MVRV ratio for ETH is 11.89%, well below the common threshold for local tops, indicating that Ethereum is not overvalued. The bullish sentiment provides accumulation opportunities for investors who believe it is undervalued.
MDIA indicator: Its upward trend indicates that more investors are holding positions, reducing the likelihood of a significant price decline, which is a positive signal for ETH price stability.
Additionally, declines in MDIA are often associated with increased trading activity within the Ethereum network. Currently, ETH is being transferred more frequently, strengthening the bullish argument, showing rising investor participation, and investors who have not entered the market may re-enter in anticipation of further price increases.
Technical analysis
Ethereum is forming an inverse head and shoulders pattern, indicating that buyer willingness may strengthen while seller momentum weakens, which is a bullish pattern. If traders observe a breakout, the cryptocurrency is expected to reach a target price of $4000, but a correction may still occur, especially when selling pressure rises significantly.
Potential challenges and support levels
Although Ethereum's positive sentiment suggests potential price growth, it may face short-term declines when selling pressure increases, needing to test the support level around $3206, which is crucial for determining whether the bullish trend is sustainable.
Current market indicators show positive signs, and the outlook for Ethereum is optimistic. Traders should closely monitor investor sentiment and price trends reflected by indicators such as MVRV and MDIA, while also paying attention to key support levels like $3206 to respond to dynamic changes in the cryptocurrency market.