Ethereum (ETH) Price Dips Below the Lower MVRV Price Band, Triggering Increased Attention on On-Chain Metrics

The ongoing Ethereum bearish market has triggered increased attention on on-chain metrics to completely understand the downtrend behind the scenes.

Crypto analyst Ali Martinez has shared his outlook on Ethereum’s (CRYPTO: ETH) market performance, adding his perspective on the token’s price movements.

What Happened: As per data shared by Martinez, ETH’s price has dropped below the lower MVRV price Band, an event that has created a perfect buying opportunity in the market.

Historically, this drop shows that purchasing tokens at this level normally generates the best profitability. This buying trend has been happening since 2016 whenever Ethereum’s price drops below MVRV.

Thanks to this decline, it appears that investors are heightening token accumulations at current lower price levels. An evidence of this purchasing behaviour is seen in the current ETH outflows from exchanges.

These outflows show that buyers are prevailing in the market, with more capitals moving out from exchanges than those coming in.

Also, whales have been accumulating. According to data from Lookonchain, a large institutional whale named "Metalpha" has bought about $50 million of Ethereum since the beginning of this month.

Another whale withdrew $100 million in ETH from crypto exchange Gate.io. Recently, a whale transferred 10,000 ETH (about $15.9 million) from Bybit to an unknown wallet.

This activity is pushing up Open Interest (OI). According to data from Coinglass, the total Open Interest on Ethereum futures contracts increased by 3.88% from yesterday to $18.52 billion.

The strong buying volume in the market is evident as traders are willing to pay a premium to hold their long positions. A large quantity of capital is flowing into the market, which is placing sellers at a disadvantage and preparing Ethereum for a recovery.

Another good sign is that Ethereum is forming a falling wedge, which is a bullish chart pattern that suggests a potential breakout from the ongoing downtrend.

This technical analysis indicator shows that the current declining price is beginning to lose strength and buyers are beginning to enter the market.

ETH is currently trading at $1,581 at the time of writing. If the buying demand seen in recent days continues, then it is likely that the bulls will push through the next immediate resistance levels, which are located at $1,615 and $1,633. Afterwards, the price of ETH could continue to rise towards the next resistance level, which is at $1,664.

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