Reasons Ethereum [ETH] traders may witness short-term gains this weekend

Please fol­low and like us:
Pin Share

Ethereum [ETH], at the time of writ­ing, was exchang­ing hands at $1,341. As of 22 Sep­tem­ber, the alt con­clud­ed a 30% retrace­ment from its Sep­tem­ber high of $1,789. A far cry from what many investors expect­ed from its most impor­tant month of the year. On the bright side, the alt was trad­ing at a steep­er dis­count and flash­ing recov­ery ral­ly signs.

ETH may not have retest­ed its 2022 lows but the 30% dis­count did push it back to mid-July lev­els. Anoth­er 30% drop will cer­tain­ly trig­ger that YTD low retest. Although anoth­er crash was still a pos­si­bil­i­ty, ETH’s lat­est per­for­mance sug­gest­ed that a short-term bull­ish retrace­ment was in the works.

Feeding the bulls

A 30% dis­count with­in the last two weeks was large enough to attract a lot of atten­tion and poten­tial accu­mu­la­tion. ETH exchange out­flows reg­is­tered a siz­able increase in out­flows. This was the largest out­flow reg­is­tered since mid-June.

Source: San­ti­ment

Rough­ly 104,000 ETH flew out of exchanges between 21 and 22 Sep­tem­ber. This equat­ed to rough­ly $132 mil­lion in buy­ing pres­sure. In con­trast, rough­ly 18,000 ETH was deposit­ed onto exchanges dur­ing the same peri­od. Exchange out­flows far out­weighed the amount of inflows, thus con­firm­ing a strong demand uptick.

ETH’s 180-day Mar­ket Val­ue Real­ized Val­ue (MVRV) ratio took a dive since 10 Sep­tem­ber, around the same time that the price tanked. This con­firmed that most peo­ple who held ETH at the time, espe­cial­ly those that bought pre-Merge are out of mon­ey. How­ev­er, the same met­ric reg­is­tered a slight uptick in the last two days.

Source: San­ti­ment

The MVRV’s piv­ot in the on 21 Sep­tem­ber con­firmed an increase in the lev­el of demand near the cur­rent lows. It also reflect­ed high­er out­flows from exchanges observed in the exchange out­flow vs. inflow metrics.

ETH’s price action and indi­ca­tors also cement­ed the short-term bull­ish expec­ta­tions. ETH’s six-hour chart revealed a strong bear­ish can­dle towards the end of 21 September’s trad­ing ses­sion. The pull­back pushed the price low­er than its pre­vi­ous low a day pri­or. Despite this out­come, the Rel­a­tive Strength Index (RSI) reg­is­tered a high­er low com­pared to its pre­vi­ous high.

Source: Trad­ingView

The above out­come under­scored a price to RSI diver­gence. This is often con­sid­ered a bull­ish out­come and could be a sign that ETH is head­ed for a bull­ish weekend.

Fur­ther­more, ETH’s on-chain met­rics com­bined with the price action rein­forced ETH’s short-term bull­ish poten­tial. Investors should still take note that ETH wasn’t over­sold yet despite the lat­est down­side. Hence, a poten­tial for a fur­ther downslide below cur­rent lev­els still exists.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.