Cryptanalyst firm Santiment is warning investors that certain metrics show selling pressure on the horizon for the top smart contract platform Ethereum (ETH).
Although ETH has recovered from the recent general slump in the crypto market, Santiment says in a new blog post that the increasing supply of ETH on exchange platforms is a bear flag.
“In the last few days we have seen strong increases in the ETH supply on the stock exchanges, which indicates that appropriate selling pressure is emerging.
It looks like sellers are using every price pump to get out of their positions whenever possible (especially if they previously missed an opportunity to sell). “
The Insights company goes on to say that the MVRV 7D metric, which measures holders’ short-term profit and loss, shows that ETH is in a “danger zone.”
“All short-term owners are profitable right now – which could encourage them to take some profits.”
However, Santiment points to Ethereum’s network growth and daily active addresses as positive developments that could signal that the Blockchain wins new users.
“The network growth at ETH shows a certain divergence, as prices are falling we see an increase in network growth, which is kind of unusual. Could this be a sign that cautious (those who don’t do FOMO during price increases) new entrants are finally getting on?
The daily active addresses of the ETH stay healthy, [the] Network is still very active regardless of the price movement we see.
So far a good sign. “
Ethereum is trading hands at $ 3,890 at the time of writing, up 6% from its 7-day low of $ 3,660.
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Source: Crypto News Deutsch