Ethereum failed to reach the $5,000 level earlier this month and is now struggling to stay above $4,500.
The king of altcoins faces increasing pressure, as recent market conditions weaken support levels. With rising sell-offs, Ethereum may be vulnerable to further declines in the near term.
Ethereum holders are increasing sales
The MVRV ratio for Ethereum has risen to 2.15, indicating that investors on average currently have 2.15 times their initial capital in unrealized gains.
This level has historically coincided with increasing profit-taking periods. Similar patterns were observed in March 2024 and December 2020, both followed by increased volatility.
On-chain data confirms that profit-taking is indeed high. Investors are using these levels to take profits, leading to increased selling pressure. The correlation between the current MVRV ratio and previous cycles highlights the likelihood of short-term corrections.
Ethereum MVRV
The net change in trading positions highlights selling activity. Investors have shifted from accumulation to distribution, with 521,000 Ethereum worth $2.3 billion sent to exchanges over the past week.
This metric indicates widespread profit-taking in the market. Such actions typically increase the likelihood of prolonged corrections.
The timing coincides with the MVRV signal, reinforcing the historical pattern of sharp declines following significant unrealized gains. It seems that fear of overbought momentum is driving capital rotation. The combination of strong inflows and high profit-taking is weakening.
ETH price remains at risk
Ethereum is trading at $4,433 at the time of this report, which is below the resistance level of $4,500. The asset has been unable to reclaim this level as support, indicating weakness in maintaining higher levels. Without renewed buying, Ethereum faces the risk of sliding into lower ranges.
Current conditions suggest that Ethereum could break the support level at $4,222. A drop below this level may push the leading digital currency toward $4,007 or lower. This move would confirm broader selling trends and aligns with on-chain indicators indicating profit-taking.
If selling pressure eases, Ethereum could bounce back from $4,222 and try to reclaim $4,500. A successful recovery could extend to $4,749, regaining strength in the short term. This move would negate bearish signals.
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