Ethereum: Can ETH recent analysis and onchain data predict a downtrend coming?

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Ethereum: Can ETH recent analysis and onchain data predict a downtrend coming?

Ethereum Recently

Ethereum [ETH] may be at risk of further declines despite having lost over 23.2% of its value to trade at $1,260 over the past seven days. The reason for this possibility is that on-chain withdrawals from altcoins are highly skewed.

Onchain Edge, in a November 11 CryptoQuant post, noted the status of these withdrawals. Furthermore, he suggested that ETH investors can expect another price correction due to these actions.

According to the announcement, the possibility is at the top. Also, a correction at the current stage is not a bad omen for Ethereum in the long run. While backing his argument, he also pointed out that similar cases occurred in May and November 2021. The most recent occurred in May 2022.

ETH Analysis Data

According to on-chain data, Glassnode reveals that Ethereum’s total incoming volume has dropped significantly since Nov. 9. The drop is certainly not without doubt that has rocked the ecosystem since its inception. FTX collapsed. With these low exchange deposits, it means that many investors are looking for other options to store their ETH. While this data may indicate less selling pressure, the reason for this drop could be due to much less activity. 

Source: Glassnode

In addition to the lack of interest in trading on the stock exchange, the derivatives market is not left out either. A further disclosure from Glassnode shows that futures trading volume over the past 24 hours has been very negative across all exchanges. At press time, Binance futures volume has dropped by $8.30 billion during the aforementioned period.

This represents one of the worst levels of interest since early 2022. Thus, this state of the chain, if it does not improve in the coming days, could be in line with the harbinger of prices. will continue to decrease.

Source: Glassnode

To a greater extent, Santiment shows that the possibility cannot be ruled out. At the time of writing, the on-chain data analytics platform revealed a 30-day market-to-reality (MVRV) ratio of -7.723%. With that value, it implies that ETH investors have recently lost money.

Moreover, the profits achieved previously, especially on trades, are now mixed. Similarly, MVRV's Z-score is negative at -0.0262. As a result, realized capitalization has the potential to be higher than undiluted market capitalization.

Source: Emotions

Will we see more downtrends?

However, indicators from the Exponential Moving Averages (EMAs) suggest it may be time for a correction. This is because the 50 EMA (yellow) was in a pole position to beat the 20 EMA (blue).

In the event that it eventually crosses, sellers can eventually take control of the market and the price drops below the current $1,250 zone. In the medium to long term, the 200 EMA (purple) indicates a correction that will eventually lead to a rally. However, it may be prudent to assume that a price drop will be an inevitable event.

Source: TradingView


Nov 13, 2022

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