ETH down 33 percent from ATH, traders buy the dip

By | January 7, 2022

Ether, the native token of the Ethereum platform, and the second-largest digital asset by market capitalization, has seen its market value drop by 33 percent from the last all-time high on November 10. In particular, the market value of ether took a big hit in the last 24 hours and went south by about ten percent.

As of this writing, it appears that ETH bottomed out just above $ 3,100 on Friday morning UTC. The question all traders ask is whether this is the bottom. Looking at the analysis of market sentiment, and according to the average ether MVRV, this is the biggest “pain” traders have felt since July last year, at which point the price jumped 118 percent from that pain point.

MVRV seems optimistic

MVRV (market value to realized value) is a ratio of the market capitalization of an asset versus its realized capitalization. When comparing these two metrics, MVRV it can be used to get an idea of ​​when the price is above or below “fair value” and to assess market profitability. Extreme deviations between market value and realized value can be used to identify market highs and lows as they reflect periods of investors’ extreme unrealized gains and losses, respectively.

Other indicator, Ethereum’s active directions vs. ETH asset price, also looks positive. Active directions have been on the rise as the asset price moves down, indicating that more market participants are active in the bear market, presumably buying the drop and perhaps stabilizing the market.

2022, the year of the merger

The early days of 2022 are not looking good for ETH as the entire market is moving south, but assets did remarkably well during 2021. Last year, the market value of ether rose more than 450 percent. , reaching an all-time high at $ 4878 on November 10. Year after year, the ether continues to rise almost 170 percent.

2022 is the year of the merger for Ethereum, as the blockchain changes its consensus algorithm from Proof of Work to Proof of Stake. So far, things are working as planned, but this will likely be a watershed moment for the Ethereum system. Whether the merger has a price is anyone’s guess.

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Source: https://cryptoslate.com/eth-down-33-percent-since-ath-traders-buying-the-dip/

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