Could Ethereum Name Service Witness a Surge Based on the $20 Threshold?
The recent performance of Ethereum Name Service (ENS) indicates a shift from its previous bearish trajectory, successfully overcoming multiple resistance barriers clustered around the $20-$22 range that had thwarted bullish efforts since the beginning of August.
Furthermore, network activity paints a positive picture for the future.
While the possibility of a price correction looms, there is optimism that the value of the Ethereum Name Service token will continue to climb.
Upcoming significant unlocks in the following months may impact the demand-supply dynamics.
Encouraging ENS Metrics Point Towards Optimism
Following substantial recent gains, the 90-day Market-Value-to-Realized-Value (MVRV) ratio turned positive, potentially paving the way for profit-taking actions and a potential price dip. However, metrics like transaction count and velocity lean towards a more bullish sentiment.
The consistent uptrend in these metrics since late October indicates heightened market activity, with transaction count reflecting the number of unique transactions occurring daily on the network.
An uptick in this parameter signifies increased market engagement.
Velocity, representing how frequently a token changes hands, has also been on the rise. Elevated prices, velocity, and transaction count suggest more active trading, bolstering the notion of a robust and dynamic market.
An analysis of address balances revealed a decrease in holdings among addresses with balances ranging from 1,000 to 1,000,000 ENS since October.
Conversely, the accumulation trend is prominent among the former category, while addresses holding less than 10 ENS, termed as “Shrimp addresses”, are displaying accumulation tendencies. Notably, large whales possessing 1 million or more ENS tokens have augmented their share, indicating their interest in acquiring more tokens.
Will Whale Transactions Propel the Next Market Rally?
By surpassing the $22 mark, ENS bulls have cleared significant hurdles and now have a favorable trajectory ahead. While Bitcoin (BTC) volatility might temporarily push ENS below $20, a swift rebound is anticipated even under such circumstances.
The steadfast defense of the 78.6% level at $15.7 since early August suggests a resilient market. Any recovery from this point could potentially drive prices towards $34.5 and beyond in the upcoming weeks.