Ethereum price action on the 4-hour chart showed a classic contraction triangle pattern. This pattern is formed through a series of lower highs and higher lows, converging to a point.
The streak started with a low of $3,168 (wave i), followed by a high of $3,680 (wave ii). Subsequent lows and highs decreased: $3260 (wave iii), $3530 (wave iv) and finally a drop to $3300 (wave v).
The collapsing triangle pattern suggested that ETH likely found a local bottom at $3300. If this triangle pattern completes, the chart suggests the potential for a breakout to the upside.
A successful rally could target previous resistance levels, turning them into new support zones.
Conversely, failure to sustain this momentum could cause Ethereum price to retest the lower boundary of the triangle or even break below, indicating the beginning of a bearish trend.
If this pattern holds true, Ethereum could witness significant price gains, targeting new highs in the coming year.
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Local Ethereum price bottom, MVRV result
An analysis of Ethereum’s Market Value to Realized Value (MVRV) ratio revealed its lagging behind recent market trends.
When the Ethereum price reached $3962, the MVRV ratio peaked at 2.26, indicating a high investor valuation compared to the realized price.
Despite the Ethereum price breaching the $4,000 mark, the MVRV ratio only rose to 1.91, showing reduced investor expectations compared to the market average.
Currently, with the drop in price, the MVRV has dropped to 1.64. This regression suggests that ETH is still lagging behind its March 2024 performance, signaling potential caution among investors.
Historically, an MVRV ratio above 2.25 has often preceded large price spikes. This level was a critical threshold, where values above that point led to parabolic growth phases in the Ethereum price market cycle.
Investors expecting an ETH-driven increase in altcoin leadership may need to temper their expectations until a significant upward correction in MVRV occurs.
It is crucial that the MVRV score exceeds the key 2.25 to predict the next big move in ETH.
This key indicator served as a harbinger of underlying market sentiment and potential speculative increases in Ethereum’s valuation.
Ethereum ICO participant in action again
In another Ethereum development, an ICO participant took a significant step by depositing 631.1 ETH, worth $2.14 million, on Coinbase.
This event occurred when the market recorded a recovery, indicating strategic timing. Originating from the Genesis block in July 2015, this participant initially received 1,940 ETH and was then worth only $601.
Over the years, despite market fluctuations, this early adopter has retained a substantial portion of his initial acquisition, now holding 1,309 ETH, currently worth around $4.4 million.
Charts and transaction flow showed large outflows directed at the major exchanges, indicating a possible setup for further selling.
These often coincide with price recoveries, as large landowners capitalize on favorable conditions. This pattern of reactivation after years of inactivity is consistent with past behavior during market upswings.
If this trend continues, the price of Ethereum could experience more significant movements from other dormant addresses.
These movements could signal new trends or changes in the market driven by experienced participants cashing out their long-term positions.
