Ethereum [ETH]: Read this before going long, investor

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  • Ethereum’s price went up by over 40% since January.
  • Net­work growth, how­ev­er, declined.

With a price increase of over 40%, Ethereum [ETH] had a suc­cess­ful Jan­u­ary. Although short-term investors can con­sid­er this a suc­cess, would it be advan­ta­geous to hold the asset for the fore­see­able future?

Read Ethereum’s [ETH] Price Pre­dic­tion 2023–24

ETH sees a three-day straight increase

A glance at Ethereum on a dai­ly time­line revealed that its surge began at the begin­ning of 2023. It was up about 1.7% as of this writ­ing, and was trad­ing at about $1,670. The asset would record a third straight gain in three trad­ing peri­ods thanks to the price increase.

Ethereum (ETH) price move

Source: Trad­ing View

Addi­tion­al­ly, a review of the dai­ly time­frame of the Rel­a­tive Strength Indi­ca­tor revealed that ETH was in a bull trend. The RSI line was at 65 and dis­played a rea­son­ably strong bull trend. How­ev­er, how favor­able is this trend for traders look­ing to go long?

Deducing ETH’s strength through Aroon

The dai­ly chart of Ethereum’s Aroon Indi­ca­tor showed that bull­ish sen­ti­ment had dete­ri­o­rat­ed dra­mat­i­cal­ly over the pre­vi­ous few weeks. How­ev­er, as of the time of writ­ing, the Aroon Up line had pumped to 100%, and the Aroon Down line was vis­i­ble at 42.8%.

The rise of the Aroon Up line coin­cid­ed with the lat­est Fed­er­al Open Mar­ket Com­mit­tee (FOMC) announcement.

Ethereum (ETH) Aroon indicator

Source: Trad­ing View

The Aroon indi­ca­tor can be used to deter­mine whether an asset is trend­ing or trad­ing side­ways. Addi­tion­al­ly, it detects when a trend has begun and end­ed. The indicator’s rise on the ETH chart sug­gests that the cur­rent uptrend is robust, which could be excel­lent news for long-term buyers.

Network growth declines

While the indi­ca­tor men­tioned above pro­vid­ed some good news for investors, this oth­er met­ric sug­gest­ed that they should pro­ceed cautiously.

Ethereum (ETH) network growth

Source: San­ti­ment

An exam­i­na­tion of the net­work expan­sion sta­tis­tic revealed a severe decline. Net­work growth dropped to rough­ly 25.9 from its pre­vi­ous steady state of 65. As a gauge of a cryptocurrency’s health and growth prospects, this met­ric assess­es how wide­ly it is being utilized. 

Is your port­fo­lio green? Check out the Ethereum Prof­it Calculator

An increas­ing net­work growth indi­ca­tor may sug­gest that a cryp­tocur­ren­cy is grow­ing in pop­u­lar­i­ty and adop­tion, while a decreas­ing indi­ca­tor may indi­cate the opposite. 

Giv­en the con­ver­gence of these two impor­tant sig­nals, this lev­el may be a favor­able chance for investors seek­ing to go long on Ethereum. They should exer­cise cau­tion, though, because a dip in price is prob­a­ble. How­ev­er, a ral­ly is immi­nent in the longer term.

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