Several on-chain metrics for Ethereum (ETH) suggest a possible short-term price correction after the cryptocurrency gained 35% in the past 30 days. ๐ ETH recently touched the $4,000 mark, sparking concerns that the price is overvalued. ๐ฌ
As the price approaches this resistance level, metrics suggest that selling pressure may be increasing, which could lead to a decline before further upside. ๐
One key metric that indicates a decline is the divergence between price and Daily Active Addresses (DAA). ๐ When this metric is negative, it means that network activity is decreasing, which could slow down the price rally. Santiment reports that Ethereumโs DAA divergence has dropped to -64.17%, indicating a decrease in addresses interacting with the cryptocurrency. ๐
Additionally, analysis from IntoTheBlock shows that Ethereumโs coin holding time has also decreased since December 6. โณ This suggests that holders may be starting to sell, increasing selling pressure. If this trend continues, ETH price could fall below $3,900. ๐ฐ
On the 4-hour chart, Ethereum price faced resistance at $4,073 and then retreated to $3,985. ๐ Cumulative Volume Delta (CVD) also shows increasing selling pressure. If this condition continues, Ethereum price could fall to $3,788. ๐ฑ In a severe bearish situation, the price could fall to $3,572. However, if the trend changes, there is a possibility that the price could rise to $4,500. ๐$ETH
