- The metrics on the chain showed that bulls were keen to buy.
- The consumer age scale indicated caution while other scales showed caution.
The buy/sell ratio has skyrocketed for Ethereum. [ETH] Over the past two days. This metric tracks the ratio of buying volume to selling volume. Values below 1 indicate bearish sentiment.
source: Crypto Quant
The term “taker” refers to the nature of the order placed, being a market order rather than a limit order. This means that these traders are willing to pay a slight premium to execute the trade at market prices. Therefore, this ratio helps measure sentiment.
Ethereum is on the road to recovery
On July 31, Ethereum was trading at $3.2K. Since July 20, the buy/sell ratio has been negative, indicating that bearish sentiment has been dominant. After the August 5 drop, the market rebound has encouraged long-term long positions.
The August 8 and August 23 readings, while bullish, may not be indicative of a sustained recovery.
The influx of Ethereum from exchanges may shed more light on this. On the 23rd, there was a massive inflow of Ethereum, indicating accumulation. The 14-day simple moving average resumed the downtrend it had been in since the price drop in early August.
This was an encouraging sign and could push prices towards the $3K resistance area.
Should traders expect a break of $3k?
The 30-day average short-term interest rate (MVRV) entered positive territory, indicating that short-term holders are making a marginal profit. The 90-day average short-term interest rate (MVRV) was still very negative. Meanwhile, the average life of the coin has been trending upward over the past three weeks.
This indicated a network-wide accumulation, which reinforced the bullish notion from the net flows metric. However, the lifetime consumption metric saw a massive spike to show increased token movement.
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Lower gas network fees mean that ETH supply could become inflationary over time, and could negatively impact ETH in the long run.
Such moves generally indicate a selling wave. Traders should be wary of selling pressure over the weekend and exercise caution during the Monday trading session.
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