Key Points
- Ethereum’s price rose over 25% in the last week, with significant accumulation by whales.
- Several metrics indicate a potential price correction in the near future.
Ethereum [ETH] experienced a significant price surge over the past week, with its value comfortably exceeding the $3.7k mark.
The digital currency gained bullish momentum, with signs of high accumulation by large-scale investors, or ‘whales’.
Ethereum’s Bullish Performance
Data from CoinMarketCap showed that Ethereum had a few less volatile days last week. However, the situation shifted on May 21st as the token turned bullish, with the price increasing by more than 25% in the last seven days.
At the time of writing, Ethereum was trading at $3,789.10, with a market capitalization of over $455 billion. The number of Ethereum transactions also saw an uptick.
According to a tweet from IntoTheBlock, the number of Ethereum transactions larger than $100k significantly increased, reaching its highest point since late March. Many of these transactions were made by whales, with Ethereum addresses holding more than 0.1% of the supply showing the highest daily accumulation in over a month. This suggests that whales were actively buying Ethereum.
Potential Price Correction
Despite the buying pressure, Ethereum’s Relative Strength Index (RSI) has entered the overbought zone, which could prompt investors to sell and potentially drive the token’s price down in the coming days.
Data from Santiment indicated that Ethereum’s Weighted Sentiment has declined in recent hours, implying a decrease in bullish sentiment around the token. Its NVT ratio also registered a significant spike, suggesting that the asset is overvalued and increasing the chances of a price drop.
However, the MVRV ratio remained bullish, with a value of over 15% at the time of reporting.
Several market indicators, including the Money Flow Index (MFI) and the Chaikin Money Flow (CMF), registered a downtick, hinting at a potential price correction. If Ethereum turns bearish, the price could potentially drop to $3.4k. On the other hand, to maintain the current rally, Ethereum must convert its $3.79k resistance into support.
