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Ethereum Has One Obstacle to Fresh Highs, According to On-Chain Data

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Thu, 01/20/2022 - 10:06
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Tomiwabold Olajide
Ethereum faces a significant barrier zone on its way to new highs
Ethereum Has One Obstacle to Fresh Highs, According to On-Chain Data
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According to IntoTheBlock, Ethereum has one obstacle to fresh all-time highs as it faces a substantial barrier zone between $3,300 and $3,900. According to CoinMarketCap data, Ethereum is currently trading at $3120, up 2.19% in the previous 24 hours.

TradingView
ETH/USD Daily Chart, Source: TradingView

More than 5.44 million addresses have acquired nearly 21 million ETH between $3,300 and $3,900, which stands in the way of new all-time highs, according to IntoTheBlock data. A decisive candlestick just over this resistance level might catapult ETH to new record highs. Alternatively, immediate support sits at $2,807 where 7.42 million Ethereum addresses have bought nearly $24 million ETH.

Ethereum also appears to have entered an accumulation phase as buy-in signals gradually return. The Market Value to Realized Value (MVRV) indicator indicates that Ethereum is currently undervalued. This fundamental index calculates the average profit or loss of addresses that bought Ethereum in the previous month.

The 30-day MVRV ratio is at -11.12%, indicating that Ethereum is trading in the "opportunity zone." The lower the MVRV ratio, the more likely it is that prices will rise.

Demand on the Ethereum network soared in 2021, with $9.9 billion in transaction fees paid during the year. Ethereum showed adoption in almost every metric: total value locked in DeFi, active addresses on the network, OpenSea volume and application developer activity all increased exponentially.

Despite this, Ethereum is losing NFT market share to Solana, as U.Today reported, according to a JPMorgan analyst study. According to the report, Ethereum's share of the NFT market is anticipated to be more important than its share in decentralized finance (DeFi) because NFTs are the "fastest-growing universe in the crypto ecosystem."

''If the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for Ethereum's valuation,'' as per JPMorgan.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.