Key Points
- Ethereum [ETH] has surpassed the $3.1k mark and is showing signs of a bullish pattern.
- On-chain metrics suggest Ethereum is undervalued, despite a recent sell-off by a whale.
Ethereum [ETH] has rebounded, with its price surpassing $3.1k on May 6th. This indicates a break through a psychological resistance level and a consolidation within a bullish pattern.
Bullish Momentum
After a downturn last week, Ethereum regained momentum on May 1st. The altcoin’s price steadily increased, with CoinMarketCap reporting a 1.55% increase in the last 24 hours. At the time of writing, Ethereum was trading at $3,144.11 with a market capitalization exceeding $377 billion.
Crypto analyst World of Charts identified a falling edge pattern on Ethereum’s chart. This pattern began in March, and the analyst suggests that Ethereum’s correction phase has ended and the altcoin is moving towards the upper trendline of the falling wedge.
On-Chain Metrics and Predictions
If Ethereum successfully breaks out of the falling wedge pattern, it could see a price increase of 45%-50% in the coming weeks. This could potentially see Ethereum surpass its March high in the event of a bull rally.
Analysis of Ethereum’s on-chain metrics supports the possibility of a breakout. The Network To Value (NVT) ratio showed a decrease after a sharp increase, indicating that Ethereum is undervalued.
Data from Santiment also highlighted bullish metrics, with Ethereum’s MVRV ratio improving over the last week and high Network Growth. This suggests that more new addresses are being created for Ethereum transfers, indicating high activity.
However, a recent tweet from Lookonchain reported a sell-off by a whale of 7k ETH, worth over $22 million. This could be interpreted as bearish, as it suggests the whale is anticipating a price drop.
Analysis of Ethereum’s daily chart was conducted to determine the likelihood of a breakout above the falling wedge pattern. The Relative Strength Index (RSI) showed an increase and had a value of 49.7, suggesting a high probability of an upward price movement. However, the Money Flow Index (MFI) was below the neutral mark of 50, indicating support for the bears.
