Ethereum: Here’s How These Metrics Can Bring Clarity to “Aggressive Traders.”

Ethereum [ETH] had a pretty rough run in July. The price of everything hit as low as $1,040 and then rose to as high as $1,640 within three weeks.

Such a price swing of over 58% is a rare anomaly in large chains like Bitcoin [BTC] and Ethereum. But the latest glorious start to the week raised some eyebrows. And you might be wondering if Ethereum will be a case of “buy the rumor, sell the news”?

Well, the Ethereum network is sending mixed signals right now. This has made it difficult for traders to be sure of ETH price movements.

Furthermore, Santiment’s data suggests that a “major” selloff is on the way. So where does Ethereum go from here? On-chain data can help us answer this question.

What does the data say?

A positive spark on Ethereum is the growing number of daily active addresses on the network. Ethereum just passed over 600,000 active addresses for the first time since May 13th. On the same topic: Ripple Vs SEC: Bad news for cryptocurrency, this pushback from the SEC in the Ripple case adds to the pressure on the market. This takes us back to when Ethereum was about to fall victim to the Luna explosion.

The weighted sentiment metric suggests that not many people are talking about Ethereum right now. News of the merger sparked interest that was unable to sustain itself.

Despite this, there is a negative bias towards Ethereum right now on social media. This is also reflected in trader sentiment activity, which is evident in ETH’s recent drop to the $1,300 mark.

Even before the start of crypto winter, Ethereum saw the start of a potentially worrying trend. Network coins sitting on exchanges had started to see a steady rise after major retracements in 2022.

However, the trend has yet to see a reversal despite July’s relief.

In addition, the market value to realized value ratio (MVRV) is another indicator of declining trader sentiment.

Average returns for traders over the past 30 days have been inflated. In a metric where anything above 15% is a signal that a network’s profits are starting to overheat, ETH’s 30-day MVRV hit a whopping 33%. Until this ratio drops to 0% trade ETH remains a risky operation.

Overall, Ethereum traders were questioned after the flagship coin lost the $1,620 level.

After a bad start to the week, ETH fell back into negative territory. This sheds further light on the “severe” negative sentiment among traders surrounding Ethereum. This also means that traders are still pessimistic about whether the Ethereum price will continue to rise.

At press time, ETH was trading at $1,381 after falling $8.62 in the past 24 hours.

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Thomas E.
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