Since the massive crash in June, Ethereum [ETH], the largest altcoin in the world, has gotten steady northbound movement. Over the past two months, ETH has consistently recorded higher lows, suggesting a rally as the date of the long-awaited Ethereum merger approaches.
However, in a recent turn of events, several cryptocurrencies, including Bitcoin [BTC] and Ethereum, have experienced a drop in prices. At the time of writing, Ethereum was trading at $ 1,636.11, a negative growth of nearly 10% over 24 hours, with a market cap of $ 199,662,199,532.
What is happening
As the price plummeted, there have been several interesting developments on ETH’s on-chain metrics. Data from Glassnode indicated that Ethereum’s Exchange Outflow Volume (7d MA) has just hit the one-month low of $ 14,564,884.80. This decline indicates a further decline in the price of ETH in the coming days, as a decrease in the volume of outflow in trade is generally a bearish sign.
Source: Glassnode
In addition, as the outbound volume decreased, the inbound volume increased, further establishing the possibility of a price decrease. As the price fell, Ethereum’s social dominance rose as the crypto community began to talk about the episode across multiple social media platforms, voicing their views regarding the same.
Source: Santimento
The drop in prices was also accompanied by a drop in Ethereum’s supply, which fell to 49,999,507 from 63,790,230, its three-month high in just 24 hours, indicating greater losses for investors.
Source: Glassnode
Market Value Realized Value (MVRV), which is an indicator of price action, suggests that Ethereum’s dark days are yet to continue. According to the chart, the MVRV ratio was well above a sign, indicating further price drops in the coming days as a value below one sign indicates a possible market low.
Source: Glassnode
A look at the downside
Although several metrics point to a possible decline in ETH, the four-hour chart also seemed to represent a gloomy picture. A bearish wedge pattern formed on the chart which led to the drop in the price of Ethereum. As indicated by the Bollinger Bands (BB), ETH’s value was in a high volatility zone, suggesting a crisis in its price in the coming days.
The Relative Strength Index (RSI) showed that the drop in the price of ETH pushed it into the oversold zone. Therefore, the possibility arises that the price may move upward, showing new support at $ 16,000.
Source: TradingView