Ethereum, the second-largest cryptocurrency, is showing growth, but analytics indicate potential risks for price corrections.
Reasons for Ethereum's Price Surge
Ethereum has gained 32% over the past month and over 5% in the past week, reaching $4,834. Key factors include strong inflows into spot ETFs approved by the SEC, and assets exceeding $30 billion in Ethereum. The rise is also linked to expectations that interest rates may lower, potentially shifting investments into riskier assets.
Risk Signals from Santiment
Santiment's analysis highlights a high Market Value to Realized Value (MVRV) ratio. The 30-day MVRV is approaching 15%, considered a 'danger zone.' The long-term MVRV at 58.5% indicates substantial unrealized profits among current holders, increasing the likelihood of selling pressure.
Optimistic On-Chain Signals
Despite the risk signs, there are several optimistic indicators. A declining mean dollar invested age and rising realized profits suggest increased trading activity. The decreasing supply of ETH on exchanges indicates a preference among investors for self-custody storage, potentially correlating with price appreciation.
While rising risks associated with market capitalization changes exist, positive long-term trends in Ethereum may support its growth.
