The silver cryptocurrency has been doing well since the start of August. In the last couple of weeks, Ethereum’s price soared by 60%, and it has added $1,200 per unit since July 22nd. Many investors showed an increasing interest in Ethereum owning to the announcement of the London hard fork event. This upgrade is going to convert the network from Proof of Work to Proof to Stake.
While all is looking well for the crypto market, some new technical evidence shows that Ethereum is preparing for a correction ahead. The current rally in the silver cryptocurrency could entice the investors to make a profit that may result in increased inflows over the exchanges and a rise in supply. Currently, ETH is trading for $3,200.
Ethereum is Facing Temporary Correction
Tom DeMark Sequential Indicator (TD) is used to predict any upcoming turning point for a specified asset class. TD readings shared by TradingView indicate that a rise in selling pressure is going to increase in the near term. MVRV or Market Value to Realized Value is an index that is used to determine if an asset is currently undervalued or overvalued.
To obtain this number market cap of the asset class is divided by the realized cap. For Ethereum, this on-chain metric adds another layer of confirmation for bearish build-up. Data projections shared by Santiment for a 30 days period MVRV is posing 26.58% profit margin for the investors who joined the market in the same duration. The crypto analytics service claimed that Ethereum investors might start to take profit and break the bullish trend with exposure reduction.
Crypto analytics “Into The Block” points the attention of investors towards an indicator that could be their saving grace. The In and Out money around price index or IOMAP highlights the presence of multiple support levels on the blockchain. These levels are a result of demand barriers that can act as a barrier against any major price corrections.
Interest area between $2,960 and $3,050 saw an addition of 320,000 addresses. These active wallets purchased 1.4 million worth of ETH. Likewise, the strongest support level lies between $2,670 and $2,860, with 1.12 million active addresses that invested $2.63 million in the silver crypto market. IOMAP indicates that this buying pressure may be slowed down by a supply increase. However, ETH could reach $3,500 if it crosses this small bracket.