Ethereum’s conflicting on-chain metrics indicate a retest of $ 1,750

  • Ethereum’s current on-chain metrics offer a 50:50 probability that ETH will go either way
  • However, similarities between the 2017/18 cycle and the current environment suggest a decline in Ethereum
  • Ethereum has also printed a rising wedge pattern, providing further evidence of an impending pullback to lower levels of $ 1,750
  • The implementation of EIP1559 could be a sell-the-news event, but time will tell

On-chain metrics on the Ethereum network currently paint a picture of a 50:50 chance that ETH will continue its uptrend or drop below the crucial $ 2,000.

This emerges from a report by the Santiment team that highlighted the following in relation to the on-chain metrics that work behind the scenes to determine the price of Ethereum.

  • Ethereum’s MVRV (Market Value at Realized Value) indicates that long-term owners are still profitable and need not yet feel the pain of ETH pulling back from its recent all-time high of $ 4,372
  • The supply of Ethereum on the exchanges is at an annual low, which reduces the possibility of selling pressure
  • Daily active addresses on the Ethereum network remain high, which indicates a healthy network
  • However, network growth in terms of new addresses has not surpassed the previous all-time highs of 2017/18
  • Ethereum’s price campaign continues to mimic 2017/18 and the subsequent “bubble burst”
  • Ethereum also competes with other networks like Binance Coin, Polygon, and Fantom due to lower transaction fees

Ethereum is printing a rising wedge that could cause a retreat to $ 1,750

In terms of technical analysis, the Santiment team has identified a sustained rising wedge on the Ethereum chart, anticipating a price decline to $ 1,750. Their analysis can be found in the following statement and the accompanying graphic.

After bouncing off the $ 1,750 levels in late June, ETH appears to have formed a rising wedge … which is usually a bearish sign of the prevailing trend continuing.

Given that the overall trend is bearish, it is very likely that it will break out of the rising wedge and continue towards the $ 1750 mark.

EIP1559 could be causing an impact, but it could be a dead cat impact

In the closing remarks of the detailed report, the Santiment team warned that Ethereum could be a dead stone’s throw before or after the implementation of EIP1559. They explained this scenario as follows.

At the moment everything is speculative and no one will really know how the market will react to the implementation [of EIP1559]. It could read: “Buy rumors, sell news”.

At the end of the day…. As soon as the opportunities for making money have dried up (be it in epee coins or legitimate projects), the participants will eventually leave, just like we saw in the 2017/18 cycle….

To sum up, ETH’s price action isn’t looking too good and it risks another downtrend. But if we get a jump it could be a dead cat if nothing changes.

[Photo by Zoltan Tasi on Unsplash]

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