- Is Ethereum recovering from its correction after its new ATH or is it approaching a sale? As the bloodbath in the altcoin market continues, this is an ongoing question for many retail traders. Although Ethereum ranks # 1 in terms of transaction volume, but the asset surpasses Bitcoin, the most important driving factor is the social volume and sentiment of retail investors.
Where is the Ethereum rally going?
Ethereum’s social volume is relatively less compared to its monthly activity. According to data from Santiment’s charts, there are more traders on Crypto Twitter talking about Ethereum than any other cryptocurrency. While there is an expectation that social volume can turn into social capital, the likelihood of a gradual sale increases if people start selling and spreading a sale news. This is the disadvantage of Ethereum’s social layer, plus Ethereum’s MVRV is currently in the red zone. The asset may be over-inflated right now and it might be time for a fix.
Ethereum’s falling entries have rebounded, and this could mean that foreign exchange reserves are increasing and the coin is the end of the price discovery phase. The selling pressure on Ethereum has increased and there are signs that there may be a short-term cooling down period. Miners are known to give the most accurate forecast or signal for an asset, and when it comes to Bitcoin, miner activity gives insight into the direction of the price trend.
Miner activity critical
Based on miner activity, Ethereum miners are selling quite a lot. Sales from miners indicate that besides covering operational costs, there may be an upcoming sale and miners are leaving in front of institutions and retail investors.
Miners’ balance has dropped below 1 million Ethereum for the first time in a long time, and miners may have been selling since early December 2020. This raises concerns among traders as sales are approaching fast and soon. While there is anticipation of price discovery beyond the new ATH, the price rally may go in the opposite direction this time, depending on what miners are currently implying.