Ethereum Soars Post-Bitcoin Halving, Despite Selling Pressure Concerns

Following a Bitcoin Halving, both Bitcoin and Ethereum prices have seen gains, supported by strong fundamentals. While Bitcoin reached a milestone of 840,000 blocks, Ethereum investors are displaying bullish sentiment despite an increase in loss-making addresses, potentially signaling selling pressure in the altcoin market.

Ethereum Price Soars Post-Bitcoin Halving, Despite Concerns of Selling Pressure

Following the highly anticipated Bitcoin halving event, the blockchain industry has witnessed several noteworthy milestones. Bitcoin's block count has reached 840,000, while the halving itself has reduced the mining reward to 3.125 Bitcoin per block. Surprisingly, despite predictions of a potential price drop due to selling pressure from miners, Bitcoin's price has surged, approaching $66K. Ethereum, the second-largest cryptocurrency, has also experienced a rally, supported by a range of positive on-chain metrics. However, concerns have been raised about the increasing number of loss-making Ethereum addresses, which could pose a potential risk of selling pressure on the altcoin.

Ethereum Investors Maintain Bullish Outlook

Data from Coinglass reveals that, despite recent price volatility, the majority of Ethereum investors remain bullish. This optimistic outlook is exemplified by the actions of a trader who, despite suffering a $4.5 million loss from a previous long position on ETH, has opened yet another long bet on the token. Over the past 24 hours, ETH price has witnessed a total liquidation of over $14.8 million, primarily driven by buyers.

Loss-Making Addresses Raise Concerns

However, data from IntoTheBlock suggests that ETH's price may face a short-term setback due to the surge in loss-making addresses. The proportion of out-the-money addresses has jumped from 8% to over 18% in a week, indicating rising impatience among holders. If ETH price fails to register further gains or triggers a correction, these holders may intensify selling pressure by closing their positions.

Netflow Metrics Indicate Buying Demand

The Netflow metric, which measures the difference between inflow and outflow volumes on exchanges, currently stands at -16K ETH, indicating that outflow volume is surpassing inflow. This suggests that buying demand is outweighing selling pressure, potentially reducing the likelihood of an immediate sell-off.

MVRV Ratio Suggests Potential for Price Stability

Insights from IntoTheBlock reveal that Ethereum's Market Value to Realized Value (MVRV) ratio has fallen, suggesting that many Ethereum holders are yet to see profits. This scenario could be beneficial for ETH's price, as these holders may retain their holdings in anticipation of further increases, potentially stabilizing the price against downturns.

Ethereum Growth Metrics Paint Mixed Picture

While these factors create a generally bullish sentiment for Ethereum, indicators of the network's growth present a mixed picture. Data from Santiment indicates a slowdown in the rate of new user adoption within the Ethereum ecosystem, which could potentially lead to further price drops.

Technical Analysis Suggests Price Consolidation

Ether has approached the 20-day EMA, currently at $3,158, signaling an attempt by bulls to regain momentum. However, sellers are creating strong resistance around the $3,200 mark, limiting the current buying demand. As of writing, ETH price trades at $3,165, declining over 1.5% in the last 24 hours.

The 20-day EMA is flattening, and the RSI is hovering just above the midpoint, indicating an equilibrium in market forces. Should the price retreat from the 20-day EMA, the ETH/USDT pair may pull back to $3,056. This level is crucial for the bulls to hold, as a breach could lead to a drop towards $2,800.

Conversely, if Ether breaks above the 200-day EMA, it could boost the buying momentum. The pair could then target the 50-day SMA at $3,586 and potentially extend gains to $3,700. Surpassing this threshold would signal the potential end of the corrective phase, paving the way for a retest of $4K.

Conclusion

Despite concerns over the increasing number of loss-making Ethereum addresses, indicators such as the MVRV ratio and Netflow metrics suggest that the overall sentiment for Ethereum remains positive. The technical analysis suggests a period of consolidation, with support at $3,056 and resistance at $3,200. Should Ether break above the 200-day EMA, it could trigger a rally towards $3,700 and potentially higher. The broader cryptocurrency market remains volatile, and investors are advised to exercise caution and conduct thorough research before making any investment decisions.