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Ethereum Falls Below $2K; This Indicator Reveals Hidden Bullish Divergence on Price


u.today 18 May 2022 16:39, UTC
Reading time: ~2 m

According to CoinMarketCap data, Ethereum has returned beneath the $2K mark once again, down nearly 4% to $1,975 at the time of publication. On-chain analytics platform Santiment suggests that its NVT model is predicting a bullish divergence, owing to the recent price dip. When prices fall to a new low and an oscillator does not, this is known as a "bullish divergence." This condition might indicate that bears are losing ground and that bulls might soon regain control of the market.

🐂 #Ethereum's price retrace has coincided with a rise in the asset's token circulation. After a 10-month stretch of $ETH not receiving enough network circulation to justify high market cap levels, our NVT model shows a #bullish divergence due to such a dramatic dip occurring. 📉 pic.twitter.com/WcfkpLfmAM

— Santiment (@santimentfeed) May 17, 2022

The NVT Ratio (Network Value to Transactions Ratio) is the ratio of market capitalization to volumes transacted. A healthy NVT ratio can be bullish for the price of the crypto asset.

In its recent Santiment Insights report, the on-chain analytics platform notes, "ETH's MVRV 90D, which measures the mid-term profit/loss of holders, is showing that we are almost into the opportunity zone, which historically saw a local bottom being developed with a decent R/R."

📈 #Ethereum $ETH Number of Addresses Holding 100+ Coins just reached a 6-month high of 43,151

Previous 6-month high of 43,149 was observed on 17 May 2022

View metric:https://t.co/FbjiMG3uFX pic.twitter.com/8VWqpNFTJw

— glassnode alerts (@glassnodealerts) May 18, 2022

However, the ETH number of addresses holding more than 100 coins just reached a six-month high of 43,151 per Glassnode alert, suggesting either an influx of large holders or simply retail holders increasing their supply.

Ethereum "Merge" updates

Ahead of Ethereum's highly anticipated migration to proof-of-stake (PoS), Cloudflare, a cybersecurity organization, is set to activate and fully stake Ethereum validator nodes in the next few months.

Ethereum developer Tim Beiko indicated over the weekend that the Ropsten testnet might "merge" in early June, precisely on June 8. Two new beacon chains may, however, be launched before then. Other testnets will be merged once the client code quality and testing coverage for the Ropsten merging are adequate, according to Beiko; otherwise, the difficulty bomb may be delayed.

Meanwhile, despite the network's high transaction costs, crypto venture capital firm Andreessen Horowitz (a16z) has stated that Ethereum's progress and demand are "unmatched." The most recent remarks were made in a blog post announcing a16z's "State of Crypto" report for 2022.

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