A few days ago, Ethereum (ETH) looked set to climb towards $3,000. However, as the last month drew to a close, momentum shifted, causing the second-most valuable cryptocurrency to fall below $2,600.
Will ETH Price Recover? This is something investors want to know. In this on-chain analysis, BeInCrypto explains why the altcoin may soon reverse the trend.
Ethereum's bearish outlook eases
According to CryptoQuant, the drop in Ethereum’s price has caused a decline in the Buy/Sell Ratio of borrowers. This ratio is calculated as the buy volume divided by the sell volume in perpetual swap trades.
When the value is above 1, it means that the trend is bullish. However, a value below 1 indicates that the trend is bearish. On October 31, the buy/sell ratio of Ethereum buyers was 0.84, indicating that the sentiment was bearish at that time.
In fact, the reading has increased and is about to reach a rating of 1. If the indicator's rating continues to rise, then the price of ETH may also head in the same direction, suggesting that it could approach $2,800, as it has been for a few days.
Read more: Ethereum ETFs – Understand what they are and how they work
Ethereum Takers Buy/Sell Ratio. Source: CryptoQuant
Another metric that supports the bias is the 30-day MVRV ratio. The MVRV ratio compares a crypto asset’s current market value to its realized value, offering insights into market tops and bottoms.
When the MVRV ratio is high, it often signals that the asset may be overvalued, suggesting a market top. Conversely, a low MVRV ratio may indicate undervaluation, pointing to a possible bottom.
Currently, Ethereum's MVRV ratio has turned positive, a change last seen in mid-October, which coincided with ETH's price rally above $2,700. This historical pattern suggests that if the MVRV ratio continues to rise, we could see a similar upward movement in the price of Ethereum.
Ethereum MVRV Ratio. Source: Santiment
ETH Price Prediction: Recovery Likely
On the daily chart, Ethereum price is on the verge of falling below $2,500. While this could happen, support around $2,345 will likely help the altcoin recover.
However, if this happens, the cryptocurrency will face resistance at $2,790. As seen below, the Balance of Power (BoP) indicator has jumped. The BoP measures the strength of the bulls compared to the bears.
When the reading goes down, the bears are in control. But when the BoP goes up, the bulls are in control, which seems to be the case at the moment. If this remains the case, then the price of Ethereum could rise to $2,824.
Read more: Best Ethereum Wallets in November 2024
Ethereum Daily Price Analysis. Source: TradingView
In a highly bullish scenario, ETH could rally to $3,262. On the other hand, a drop below the support could invalidate this bias. In this scenario, ETH could fall to $2,115.
The article Ethereum Seeks Recovery to $2,800 After Bullish Momentum appeared first on BeInCrypto.
