[ad_1]
Ethereum’s native token, Ether (ETH), underwent a sharp relief rally after falling to $880, its lowest level in eighteen months, on June 18.
ETH price regains 30% in two days
Ether’s price reached above $1,150 this June 19, marking 30%-plus gains in just two days. However, at the beginning of the new weekly session this June 20, the ETH/USD pair hinted at giving up its weekend gains, with its price plunging by almost 9% from the $1,150 high.
PostyXBT, an independent market analyst, told his 79,800 followers to be careful about the latest ETH price rally, noting that the move “would make for a clean fakeout.” Excerpts from his statement:
“It looks like an opportunity to flip long towards $1,250, but $BTC still hasn’t reclaimed it’s like-for-like level.”
Next ETH price bear target: $700-$800
The statements appear as Ether, alongside other top cryptocurrencies, including Bitcoin (BTC), Solana (SOL), and Cardano (ADA), have entered a bear market.
ETH/USD now trades 77% below its $4,951-record high, but some tokens are down 90% from their 2021 peak levels.
Concerns about the Federal Reserve’s hawkish policy to tame inflation has stoked these sell-offs, hurting parts of traditional stock markets in tandem. In detail, the U.S. central bank plans to hike benchmark rates into 2023, which may leave investors with lesser liquidity to buy riskier assets like BTC and ETH.
Additionally, forced selling and liquidity troubles led by the so-called decentralized finance, or DeFi, sector have added downside pressure on the crypto market, thus limiting Ether’s prospects of continuing its recovery rally moving forward.
Analyst “Capo of Crypto” states that ETH has not bottomed out yet and that its price could fall further toward the $700-$800 range.
Main target reached, bounced from there, but no bottom formation yet.
Eyes on $700-800 as new support zone, which would complete the 5th of the 5th wave. https://t.co/ZIWnzMW6bk pic.twitter.com/rT0qnY0Roe
— il Capo Of Crypto (@CryptoCapo_) June 20, 2022
ETH price bottom signs?
Meanwhile, one metric that tracks the differences between Ether’s market value and realized value suggests that ETH/USD is bottoming out.
The “MVRV-Z Score,” as it is called, assesses when Ether is overvalued or undervalued relative to its “fair” or realized value. So, when the market value has surpassed realized value, it has historically marked a bull run top.
Conversely, the market value falling below realized value has indicated a bear market bottom (the green zone in the chart below). Ether’s MVRV-Z Score entered the same buying zone in early June and is now consolidating inside it.
But this does not necessarily mean a trend reversal, according to the MVRV-price relation witnessed during the 2018 bear market.
Related: 5 indicators traders can use to know when a crypto bear market is ending
Notably, Ether’s MVRV Z-Score slipped into the green zone on August 12, 2018, when the price was around $319. But the Ethereum token bottomed out at a much later date, on December 14, 2018, when the price reached near $85.
In other words, Ether has entered a bottoming out stage, at best, if the on-chain fractal holds valid in 2022.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
[ad_2]
By: Cointelegraph By Yashu Gola
cointelegraph.com
