- Although trading volume on the DEX dropped to $1.03 billion, indicators showed that ETH price could surge.
- The liquidation levels suggested that the altcoin could leave even more short sellers in liquidation.
Ethereum Activity [ETH] AMBCrypto has seen trading volumes on decentralized exchanges decline over the past seven days, with volumes on May 28th at $3.34 billion, according to Messari data.
However, press time data Indicated DEX volume fell to $1.03 billion, a decrease of $2.21 billion. An increase in DEX volume would have meant more liquidity for Ethereum.
The drop means that there aren’t as many on-chain transactions involving ETH as there were last week. Another interpretation is that it indicates a decline in demand for altcoins.
Source: Messari
A “little” fall isn’t the end
As demand dwindles, ETH may find it harder to experience significant price growth. At the time of writing, the price of ETH is $3,763, representing a 3.50% drop over the past week.
The disappointing price movement is one of the reasons why some participants share the opinion that Ethereum may not be a key part of the bull market.
However, AMBCrypto found that this was not the case, due to the signal provided by the Market Value vs. Realized Value (MVRV) Z-Score, which has a strong correlation with price.
The result is an indication of whether the cryptocurrency is in a bearish or bullish phase. If the score is negative, it means that the asset is in a bearish phase. From the chart below, the last time ETH was in such a state was in October 2023, meaning that the token moved into a bullish phase.
At the time of writing, the MVRV Z-score was 1.63. Past bull market peaks Looking at the examples of 2017 and 2021, we can see that the indicators reached 14.19 and 4.76 respectively. If this pattern repeats, it could mean that the price of Ethereum could rise further.
Source: Santiment
But that’s a long-term thing. In the short term, AMBCrypto analyzed liquidation levels, which are the prices at which exchanges forcefully close traders’ positions.
Bears beware! ETH looks poised for a recovery
The rationale behind this is to prevent further losses. At the time of writing, a large Ethereum liquidation could occur between $3,882 and $3,946, suggesting that the price may move towards the aforementioned area.
Additionally, we looked at the Cumulative Liquidation Level Delta (CLLD), where a positive value indicates more long liquidations, while a negative value indicates more short liquidations.
Source: Hiblock
Ethereum [ETH] Price forecast 2024-2025
Looking at the chart, CLLD is in the negative with over $59 million in short liquidations over the past seven days.
However, in terms of price, a negative CLLD would be bullish for ETH and late shorts may fail to capture the dip. In this case, ETH could recover and the prediction towards $3,946 could come true.
