As Ethereum’s price experiences a remarkable 20% rally in October, investor confidence soars higher, fueled by the decreasing supply of ETH on exchanges.
Ethereum (ETH) price continues to hold above a crucial support level after a significant climb beginning in mid-October. The second largest cryptocurrency by market capitalization may have more gusto to move north, based on technical fundamentals, with data indicating a renewed investor confidence for ETH.
Ethereum price is up almost 20% from the October 12 low of $1,523, drawing investors back to the scene. Santiment data shows dwindling ETH supply on exchanges, suggesting an intention to hold. Increased buying pressure could send the altcoin 5% north, clearing the immediate barrier as the $1,900 psychological level looms. However, a daily candlestick close below $1,748 would invalidate the bullish thesis.
Ethereum (ETH) is bullish, boasting a 20% surge in the month of October alone. In the last 24 hours, the largest altcoin by market capitalization is up 0.11% with a trading volume increase of almost 90%. Increased buying pressure could see the cryptocurrency extend north, shattering the immediate roadblock at $1,856 before tagging the $1,900 level.
In a highly bullish case, the gains could extend for Ethereum price to revisit the forecasted $2,000 psychological level. Such a move would constitute a 10% climb above current levels.
Technical indicators showing momentum, including the Relative Strength Index (RSI) and the Awesome Oscillator (AO) support the case to the upside, showing that bulls have their best foot forward. The RSI remains northbound, holding above the 70 level to show bulls have more action in the cards for Ethereum price. Similarly, the AO is in the positive territory as bulls head the market.
Data according to behavior analytics platform Santiment shows investor confidence for ETH is increasing. There is decreasing Ethereum supply on exchanges, which shows that investors’ selling appetite has dwindled even as the altcoin’s price continues to rise. It shows investors are willing to ride the rally rather than booking early profits. ETH is also recording increased social dominance as investors are enthused with the uptrend in Ethereum price.
Lastly, the proof-of-stake token is also recording a growing market capitalization for the Tether (USDT) stablecoin, a move often attributed to new money flowing in or capital inflow as investors look to buy ETH.
On the other hand, a subsequent rejection from the $1,856 could see Ethereum price drop, possibly going as low as to lose critical support offered by the $1,748 level. A decisive daily candlestick close below this level would invalidate the bullish thesis.
Based on Santiment’s Market Value to Realized Value (MVRV) ratio, over a 30-day period, Ethereum price is now in a “danger zone.” This metric measures the short-term profit/loss of holders and currently shows that we have reached the peak since October 21. In the past, a foray above this level saw short-term holders who are well in profit cash in for early gains. The danger zone can also be referred to as a “historical sell zone.”
Broadly, when the MVRV shows elevated values, it means there is a high level of unrealized profit. Consequently, the risk of investors selling their holdings for profit is high. In the same way, a low MVRV points to a small level of unrealized profits, possibly indicating that an asset is undervalued or is experiencing low demand.