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Things are not going well for the king of altcoins. Despite many major updates, the price remains stuck below $2,000. In 2021, a price of $2,000 was a difficult target to achieve for Ethereum (ETH). However, the bearish market conditions and negative inflation have brought losses for ETH investors. So what does the current situation tell us?
Ethereum (ETH)
According to expert analyst Ali_Charts, the largest altcoin in terms of market value, Ethereum (ETH), may experience more losses. This view is due to Ethereum’s Market Value – Realized Value (MVRV) ratio falling below the 180-day simple moving average (SMA). The MVRV ratio tracks the ratio between the current market price of an asset and the average price at which each coin or token was purchased. A positive MVRV ratio above one indicates that an asset is overvalued.
According to Santiment, the higher this ratio, the more historically inclined investors are to sell. Conversely, a negative MVRV value indicates that the value of the asset is low because owners of the asset would incur losses if they were to sell at the current price.
ETH Coin Price Predictions
As stated by Ali_Charts, when an asset’s MVRV ratio is above the 180-day SMA, the market value is greater than the realized total profit, indicating a bullish trend in the market.
On the other hand, when the MVRV ratio is below the 180-day SMA, the market value is less than the realized total profit, indicating the opposite.
Regarding ETH, the MVRV ratio recently dropped below the 180-day SMA, suggesting that the recent price decline may not have ended yet. Due to market uncertainty, many investors have been reducing their risks for a long time. Since August 17, when the market experienced a significant liquidity outflow, fundamental momentum indicators have declined, indicating a decrease in buying pressure.
Similarly, CMF gave a negative value of -0.08 and has held a position since the capital outflow. In general, a CMF value below the zero line is an indication of weakness in the market.
