Key Points
- Exchange flow metrics indicate a potential local bottom for Bitcoin and Ethereum.
- Market sentiment remains bearish, with holder behavior at crucial support levels being key for future price moves.
Bitcoin and Ethereum bulls are finding it challenging to shift the market dynamic in their favor.
After significant losses over the past ten days, both cryptocurrencies are back at a support zone where buyers are expected to halt the sellers.
Ethereum’s Undervaluation and Bitcoin’s Mining Activity
Ethereum’s MVRV and NVT ratios suggest that the asset might be undervalued.
While a liquidity pocket at $3500 could trigger a short squeeze, the overall momentum remains bearish.
On the other hand, a recent investigation into Bitcoin’s activity shows a decrease in mining activity and miners selling off their Bitcoin.
However, the selling pressure has started to decrease over the last two days.
The movement of both assets from exchanges was analyzed to gauge market sentiment.
The findings suggest that bulls might not have much to celebrate just yet.
Understanding Exchange Netflow Metrics
The exchange netflow metric provides valuable insights into the market.
Positive flows indicate potential selling pressure, as it suggests that participants are sending their cryptocurrencies to exchanges to sell.
On the contrary, values below zero indicate that outflows are greater, which is good news for buyers.
This suggests that market participants are withdrawing their assets from exchanges, likely for safer storage, indicating accumulation.
In the case of Ethereum, significant inflows were observed in mid-March and late May, both marking a local top for the price.
Over the past month, the net flow has been heavily negative, indicating accumulation.
For Bitcoin, there was consistent accumulation in February and March.
The 30-day simple moving average shows that the outflow of Bitcoin from exchanges continues to dominate.
Consolidation for Bitcoin and Ethereum?
An examination of the in/out of the money data from IntoTheBlock highlighted key support regions for both Bitcoin and Ethereum.
Ethereum has strong support from $3080-$3180 and $3280-$3381, with $3486-$3586 serving as staunch resistance.
For Bitcoin, the $59,450-$61,263 range is a support zone, with $63,148-$64,960 serving as resistance.
This suggests that the current price consolidation for both these crypto market leaders could be confined within these levels, leading to a range formation.