Ethereum (ETH) has displayed signs of weakness, despite recent gains falling short of breaking the $3,400 threshold. This has sparked concerns about a potential short-term correction phase for ETH, as indicated by various metrics.
An important metric to consider is MVRV Momentum, which indicates that Ethereum has been on a consistent decline since its drop below $3,400 on June 23, 2024.
This decline could signal a looming downtrend for ETH, underscoring the importance for traders to exercise caution while also scouting for potential long-term investment opportunities should Ethereum shift its current trajectory.
When examining the monthly timeline, Ethereum appears to be paving the way for a significant bull run in 2025. Drawing parallels with the 2021 bull market, ETH underwent a phase of retesting and accumulation in August, September, and October of 2020.
This year, ETH seems to be mirroring a comparable retesting and accumulation phase during the same months.
This pattern hints that while Ethereum might face further downturns in October, there could be a reversal towards the year’s end, laying the foundation for future growth.
Ethereum’s Value and Market Sentiment
When assessing Ethereum’s performance against Bitcoin (BTC), indications point towards a continuation of the current downtrend.
ETH’s value against BTC has descended to 0.000295, breaking below the critical support level of 0.0004. This further solidifies the notion that Ethereum could experience additional declines in the short term, as Bitcoin’s outperformance over ETH persists across various time frames.
Another element contributing to the bearish outlook on Ethereum is its standing in social sentiment rankings.
Ethereum holds the second spot, closely trailing Chainlink, in the roster of assets with the most pessimistic sentiment among the community during this period of market uncertainty.
Historically, assets with prevalent bearish sentiment often witness a potential for a price surge. While the decline in sentiment may lead to further drop in prices, it also unveils a silver lining for a possible reversal.
If the bearish sentiment wanes, it could trigger a surge propelling ETH to higher levels, potentially achieving new peaks in 2025.
Despite the prevailing downtrend, Ethereum holds promise for a turnaround, especially with the anticipated 2025 bull market approaching.
Traders are advised to exercise caution in the short term while monitoring key support levels, which could serve as early indicators of a bullish reversal.