 price has defended the 200-day EMA. Furthermore, the token generated a bounce-back scenario.){kind=link}
- Ethereum price has been hovering in a bullish candlestick pattern.
- The trading volume has dropped by 36.90% to $43.38 Billion.
Ethereum’s (ETH) crypto stayed high in November and reached a critical $4000 level. Buyers, however, grew weary of this area and favored booking profit.
The Ethereum price declined gradually because this profit booking was not overly aggressive. Amid this bearish trend, sellers lost ground close to the $3K mark. The ETH price has formed a double-bottom pattern for the past few days while defending the 200-day EMA.
Ethereum has always lagged behind Bitcoin in the cryptocurrency space. Nonetheless, research suggests that Ethereum’s market value may be increasing.
According to cryptocurrency analyst Ali Martinez, the Ethereum price may reach $7,000 in the current bull market. That would draw more investors to the platform.
MVRV Pricing Band Analysis
Ali Martinez claimed that one of the best indicators for predicting the trajectory of the Ethereum price is the MVRV ratio. One tool for determining if an asset is overpriced or undervalued at a given moment is the MVRV ratio.
In a bullish run, Ethereum has consistently outperformed the 3.2x MVRV. For example, Ethereum increased to levels above $1000 in 2017 and almost $4900 in 2021.
According to Martinez, Ethereum’s MVRV is expected to rise above this threshold once more and reach $7,000.
ETH Price Analysis Based on Technical Chart
The ETH price was trading at $3,249.00 at press time, which has declined by 0.94% over the past 24 hours. The market capitalization was $391.22 Billion and ranked 2nd in the cryptocurrency market.
On a daily basis, the Ethereum price chart created a falling wedge pattern that circled the breakout zone.
It would be a buying opportunity if the price caused a breakout from the wedge pattern. The price might reach the $4K mark, a significant resistance level, if it gains bullish momentum.
On the other hand, sellers might take the lead if the price falls below the 200-day EMA. If this level is lost, sellers might be drawn in, and the price might drop to the $2K major support level.
The bearish trend has halted near the 200-day EMA,, showing buyers have bounced back. RSI has triggered a golden crossover with the RSI-based moving average,, showcasing the bullish trend.
According to current data, the MVRV band is in line with another possible increase towards the $7k level. It could replicate or even outperform past market rallies if this occurs.
Ethereum Price on the Verge of Breakout
The recent analysis of the Ethereum price suggested a potential bullish trend. With this, the price patterns indicated possible movement toward the $7,000 mark.
Despite recent profit-taking, the formation of a double-bottom pattern could offer significant buying opportunities. Moreover, the defense of the 200-day EMA could indicate the same.
The MVRV ratio supported the optimistic outlook. This suggested that the ETH price may break above previous performance thresholds soon.
However, caution is warranted. A drop below the 200-day EMA could signal a shift in momentum, with potential support near the $2,000 level.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
Dr. Naveen Singh is an entrepreneur with achievements in sports, academics, healthcare, innovation, blockchain technology, telecommunications, and philanthropy. He is the Co-Founder and Chief Executive Officer (CEO) of Inery, the first layer-1 blockchain programmed for database management. With Inery, he aligns with his vision of a new paradigm for data to empower web3 and complete decentralization.