ETH’s 7-day MVRV drops to -1.35%: Short-term investors are suffering losses, further declines are likely.
Whale Accumulation Increases: Addresses Holding At Least 1,000 ETH Rising in December, Bullish Signal!
$3,987 resistance may trigger rally to $4,100; however, bearish EMA may test support at $3,500.
Ethereum (ETH) has crossed the $4,000 level for the first time since March 2024 and is up 25% in the last 30 days. However, the 7-day MVRV ratio is currently at -1.35%, suggesting that short-term investors are experiencing unrealized losses, suggesting that further declines are possible.$ETH
Historically, a recovery is usually seen when ETH’s MVRV ratio drops to -4% or lower. This is parallel to the increase in the number of addresses holding at least 1,000 ETH in December. ETH is facing strong resistance at $3,987, but breaking this level could trigger a rally to $4,100. On the other hand, the convergence of EMA indicators suggests that there may be tests of support at $3,500.
ETH’s 7-day MVRV ratio has fallen to -1.35% from 3.32% on December 16. This suggests that short-term investors are losing money on average. It is important to note that when the MVRV ratio drops to negative levels, it usually indicates a pessimistic market sentiment and often indicates oversold conditions.
This suggests that the potential downside risks for ETH have diminished and that an environment has emerged where the low valuation could re-energize buying interest. ETH’s 7-day MVRV ratio typically drops to -4% or -5% levels before major price spikes. This could trigger accumulation and create a favorable backdrop for Ethereum to soon reach historic levels.
The number of addresses holding at least 1,000 ETH has been increasing throughout December, from 5,524 on December 1 to 5,580 on October 30, a three-month low. The figure is now at 5,612, reflecting accumulation by large investors, or “whales.”
It is important to follow whale movements because large investors can significantly influence market trends. An increase in whale addresses is often interpreted as a bullish signal, indicating that large investors are expecting more upside for ETH. Accumulation by whales can often be a precursor to upward price momentum.
ETH Price Prediction: Can It Retest $4,000?
ETH price is currently trading between the resistance at $3,987 and the support at $3,763. If the resistance breaks, ETH price could reach $4,100 and further increases could continue towards $4,800 or $4,900, where it could potentially target new highs if buyers regain control.
However, the convergence of the EMA indicators could be a sign of a weak trend in the short term. When combined with the 7-day MVRV, this suggests that the price of ETH could face downward pressure and a drop could be seen in the short term.
If the short-term EMA breaks below the long-term EMA, it will be considered a bearish signal and the ETH price could test the $3,500 support. A break of this level could spark a deeper decline, sending prices down to $3,256.