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ETH Analyst Warns: ‘ clean fakeout’ despite 30% recovery

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An ETH on-chain indicator signaled the bottom out phase for the token. ETH has undergone a brief rally after its dip to $880 on June 18th.  And in the past two days, the coin has managed to recover 30% of its value. 

June 19th, Ether price reached $1,150 marking a 30% gain in only two days. While these seem like great guns, there is a hint that the price will not mean anything significant for sustained gains as its price has gone down from this high by 9%. 

An independent market analyst, PostyXBT, suggests that investors tread carefully about the latest Ether price rally, saying the gains “would make for a clean fakeout.”

“It looks like an opportunity to flip long towards $1,250, but $BTC still hasn’t reclaimed it’s like-for-like level.”

These statements come along with the other top cryptocurrencies entering a bear market trend. BTC, SOL, and ADA, have all entered a bear market despite the ETH gains signaling that this may be a short lived game on the part of ETH. 

Looming concerns over the Federal Reserve’s hawkish policy with the goal of taming inflation has catalyzed the recent sell-offs. This has also played a big part in hurting the traditional markets as well. With plans to hike benchmark rates in 2023, investors may be left with less liquidity when buying riskier assets. 

The DeFi sectors lead enforced sell-offs and liquidity problems has also limited ETH prospects recovery from the rally moving forward. Cap of Crypto, another well known market analyst has also stated that ETH has not bottomed out yet, and suspects the price to fall even further to the $700-$800 range. 

There is one metric tracking the variations between Ether’s market value between its realized value which suggest that ETH/USD is bottoming out. Called the MVRV-Z Score, this is an assessment of the overvalued or undervalued nature of Ether in relation to its realized value. When the market value surpasses the realized value, a bull run top is signified. This  also means that the market value falling below the realized value indicates a bear market bottom. Ether’s MVRV-Z Score has entered the same buying zone as seen in early June.

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