Key Points
- Ethereum’s price decrease might soon end due to a positive reading of the Bulls and Bears indicator.
- Ethereum’s network being overvalued could potentially obstruct an upswing.
Despite a 7.30% decrease in the price of Ethereum [ETH] in the last 24 hours, a key indicator suggests that the decline might soon end.
The Bulls and Bears Indicator
The Bulls And Bears metric by IntoTheBlock measures in addresses or volume and is usually focused on large buyers or sellers due to their significant influence on price movements.
A net negative reading of the Bulls and Bears indicator implies more large sell orders than buys which could lead to a decrease in the asset’s price.
However, data shows a positive reading for Ethereum, indicating bullish confidence in the price trend.
If this metric maintains its position, ETH might rise toward $3,100 but failure to sustain or improve could drop the altcoin’s price below $2,800.
Market Participants’ Confidence
Looking at Ethereum’s STH-NUPL (Short Term Holder — Net Unrealized Profit/Loss), it seems market participants are not exactly confident in the cryptocurrency.
ETH’s underwhelming price action has changed investor sentiment towards the coin.
In March, the metric was in the optimism region, indicating holder confidence in ETH’s price action.
Currently, the reading has reached the capitulation region, indicating market participants’ fear.
However, this fear could fuel a bounce and if the STH-NUPL continues to fall, ETH’s price might also decrease.
If buying pressure increases, Ethereum might target a rise toward $3,500.
Another indicator, the dormant circulation, suggests that ETH might soon recover.
On-chain data from Santiment shows the 90-day dormant circulation dropped to 9246, implying that long-term Ethereum investors are not selling as much as they did around the 7th and 8th of May.
However, the Network Value to Transaction (NVT) ratio suggests that ETH might still be overvalued.
Low values of the NVT suggest undervalued but for Ethereum, the metric spiked, indicating that the network is overvalued relative to transactions.
