After a rather impressive market rally and some exciting new all-time highs for some altcoins, the market was unable to escape consolidation. At press time, on the daily chart, Bitcoin and Ethereum had lost around 3% of their values.
However, as the larger market consolidated, Ethereum noticed an independent trajectory. Not in terms of price action, but data chain that paints a quick recovery from these losses. However, since the price looks bearish, can certain bullish metrics turn the tide in Ethereum’s favor? Let’s find out.
Is Ethereum the safest bet?
The market was on fire this past month and some altcoins were brighter than others. The London Hard Fork on the Ethereum blockchain gave it a much-needed boost both in terms of price and social sentiment. Despite that, however, Ethereum’s run, according to Santiment report, has been “relatively boring compared to the altcoin boom.”
In fact, it has projected gains of only 41% compared to orothers like Cardano, Terra and Avalanche, during the last 30 days.
On the bright side, the report also highlighted that, for the aforementioned reasons, ETH is, in fact, a lower risk to hold now. This, especially when compared to something like Cardano or other assets that have been absolutely roaring this month.
However, remarkably, at the time of writing, Ethereum’s Sharpe share had dropped by almost 50% over the last week. Ethereum’s Sharpe ratio had a value of 4.98, while the same for Cardano was 8.3 and 7.6 for BNB.
Ethereum testing its support levels at press time may have driven this drop in the Sharpe ratio. Generally, the higher the value of the Sharpe index, the more attractive the risk-adjusted returns will be. The same was higher for altcoins like Cardano and BNB, as of this writing.
Nonetheless, as mentioned above, the ETH ratio also seemed to have an advantage, prompting a possible move north.
Ethereum can go up if …
Ethereum token circulation recently surpassed its highest levels in two months. This is a good sign, one that can drive the asset’s price up if it falls below $ 3,000.
Furthermore, ETH’s weighted social sentiment, after being euphoric for over 4 weeks, indicated that the crowd had finally entered negative territory compared to historical averages. A fresh push into negative territory would be a great sign that a price floor is on the horizon. This could also act as a good buy-by-dip opportunity for medium and short-term buyers.
However, in particular, the NVT for Ethereum reached a 3-month ATH. This meant that the network was overvalued at the time and that there could be a reversal if higher values are not detected soon.
If this is, in fact, the highest value that NVT signals, Ethereum could see a short-term correction. However, a push from the bulls could prevent the same.
This is a machine translation of our English version.
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