- The price of Ethereum has risen by more than 25% over the past seven days.
- Most indicators pointed to a short-term price correction.
Ethereum [ETH] Last week, prices recorded a significant increase, climbing well above $3,700.
While the token price is gaining bullish momentum and showing signs of high accumulation, the whale has taken an interesting action.
Ethereum whales are stocking up
CoinMarketCap data Last week, ETH witnessed quite a few days of relatively low volatility. On May 21, the situation changed and ETH turned bullish. The token’s price has increased by more than 25% in the past seven days.
At the time of writing, ETH is trading at $3,789.10 and has a market cap of over $455 billion.
Besides the price, the number of ETH transactions also increased.
Recent Tweet According to IntoTheBlock, the number of ETH transactions above $100,000 has surged, hitting its highest level since late March, with many of the transactions being conducted by whales.
The tweet also stated that ETH addresses holding more than 0.1% of the supply had their highest daily accumulation in over a month, suggesting that whales are buying ETH.
AMBCrypto then checked Ethereum’s on-chain indicators to see if buying sentiment was prevailing across the market.
Source: CryptoQuant
Following the spike on May 22nd, we saw ETH exchange reserves begin to decline.
According to CryptoquantNet deposits on ETH exchanges were low compared to the past 7-day average, further supporting the fact that buying pressure was high.
However, the accumulation phase may soon come to an end as ETH’s Relative Strength Index (RSI) enters the overbought zone.
This could prompt investors to sell, resulting in a decline in the token price in the coming days.
Source: CryptoQuant
Is a price correction inevitable?
AMBCrypto then analyzed Santiment’s data to understand whether tokens were waiting for a price drop.
We have seen that ETH’s weighted sentiment has declined over the past few hours. This means that the bullish sentiment towards the token has declined. The NVT ratio also recorded a significant jump.
When this indicator rises, it means that the asset is overvalued and the price is more likely to fall.
Nonetheless, the MVRV ratio remained bullish, with values above 15% at the time of writing.
Source: Santiment
Is your portfolio green? ETH profit calculator
Like most indicators, some market indicators also showed a bearish trend. For example, the Money Flow Index (MFI) has fallen. The Chaikin Money Flow (CMF) has also shown a similar trend, suggesting a price correction.
If ETH turns down, investors may witness a drop to $3.4k. Conversely, to sustain the full upside, ETH would need to flip the $3.79k resistance into support.
Source: TradingView
