Despite numerous attempts to regain its footing, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has had its fair share of challenges this year. In some instances, the digital asset plunged below the $3,000 mark, an indicator of its inability to maintain a steady recovery. This lackluster performance has rippled into the investor community, inciting a wave of sales as holders scramble to secure their profits.
The investor sentiment towards Ethereum has undergone a significant shift. In light of the growing skepticism, holders have been busily offloading their assets. Over the past week alone, more than 410,000 ETH, equivalent to over $1.3 billion, has been sold. The surge in sell-offs is mirrored in the amplified ETH supply on exchanges, an unmistakable indication that investors are cashing in on the recent price fluctuations rather than holding onto their assets for potential long-term gains.
The heightened selling pressure underscores the dwindling confidence among market players, who remain skeptical of Ethereum’s capacity to uphold a significant recovery. The lack of robust upward price movement has only fueled this uncertainty, leading to a shift towards profit-taking behavior.
However, Ethereum’s macro momentum offers a mixed outlook. The Network Value to Transaction (NVT) signal, a vital metric for assessing valuation, has slumped to a 25-month low. This points to Ethereum being undervalued at the moment, a historical indicator of possible recovery and a price rally in the medium to long term.
The undervalued status reflected by the NVT signal might shield Ethereum from drastic corrections, and may offer a glimmer of hope for a shift in sentiment. If this undervalued status sparks renewed interest, ETH might have a shot at stabilizing and pushing past its current hurdles.
At present, Ethereum’s price is hovering above the support level at $3,303, following an unsuccessful attempt to break through the $3,530 barrier. Last week, the cryptocurrency dropped to $3,131, underscoring its continuous struggle to sustain bullish momentum.
Under the prevailing conditions, Ethereum seems likely to continue consolidating below the $3,530 resistance level. Failure to regain this crucial barrier could see ETH slipping back to $3,131, further eroding market confidence.
Conversely, a successful breach of $3,530 could signal a turning point for Ethereum. Such a move would likely propel the price towards $3,711, restoring investor confidence and negating the bearish outlook. However, this scenario will hinge on sustained buying pressure and favorable market conditions.
