Ethereum News Today: Investors Face Crossroads as Ethereum Balances Bullish Momentum and Bearish Signals

Ethereum’s price continues to hover near its all-time high, yet on-chain metrics indicate potential risks ahead. The second-largest cryptocurrency by market capitalization, Ethereum (ETH), is trading at approximately $4,834, just 2.2% below its peak of $4,878. Despite a 32% gain over the past 30 days and a 5% increase in the last week, Ethereum’s valuation is entering a high-risk area according to blockchain analytics firm Santiment. The firm notes that the Market Value to Realized Value (MVRV) ratio, a key indicator of market sentiment, is flashing warning signals that could precede a price correction.

Santiment’s data shows the 30-day MVRV ratio is approaching 15%, a level historically associated with market pullbacks. When this threshold is reached, Ethereum has typically experienced price declines ranging from 10% to 25%. Additionally, the long-term MVRV stands at 58.5%, reflecting substantial unrealized profits among current holders. Santiment attributes this to the likelihood of profit-taking activity should Ethereum breach key resistance levels, potentially leading to increased selling pressure [1].

On the positive side, other on-chain metrics suggest strong network activity. The mean dollar invested age is declining sharply, indicating that dormant ETH is re-entering circulation. Network realized profits are also rising, a sign of increased trading activity and optimistic market sentiment. Notably, the supply of ETH on exchanges is continuing to decline, a trend that often correlates with price appreciation. Investors appear to favor self-custody over exchange storage, reducing the readily available supply for trading and reinforcing a bullish outlook for Ethereum’s long-term prospects [1].

Ethereum’s recent strength is also supported by strong inflows into spot ETFs. After a four-day outflow streak, U.S. spot Ethereum ETFs attracted $287.6 million in net inflows on Thursday, led by BlackRock’s iShares Ethereum Trust (ETHA) with $233.5 million. These inflows, which bring the total ETF assets to $30.54 billion, indicate renewed investor confidence. The ETF landscape is being bolstered by the rise of digital asset treasuries (DATs), as corporations increasingly hold ether as a reserve asset. This trend has been supported by the approval of U.S. SEC-backed ETFs in July 2024 and the subsequent accumulation of over 6.42 million ETH by these funds, representing 5.31% of the circulating supply [2].

Ethereum’s ecosystem has also shown signs of growth, with stablecoin supply increasing by 10% to $147 billion and total network transactions reaching $880 billion. These developments are attributed to growing demand from both institutional and retail investors, as well as broader macroeconomic factors. The expectation of a dovish shift by the Federal Reserve has led to a reallocation of capital from traditional fixed-income assets to riskier alternatives like crypto. Market participants are closely watching for any policy shifts that could further fuel Ethereum’s rally [1].

Looking ahead, the Ethereum market remains a focal point of interest, with some analysts forecasting a significant price increase. XRP lawyer John E. Deaton has suggested that the sustained inflows into Ethereum ETFs and increased corporate adoption could propel ETH toward a $10,000 price target, although he cautions that a $20,000 mark may be overly optimistic. This assessment aligns with broader market sentiment, which views Ethereum as a key driver of innovation and adoption in the blockchain space [3].

Source: [1] Ethereum on-chain data: Valuation is entering a danger zone (https://crypto.news/ethereum-onchain-santiment-valuation-enter-danger-zone/) [2] BlackRock leads $287M spot Ether ETF inflows after 4-day ... (https://cointelegraph.com/news/spot-ether-etfs-287m-inflows-blackrock-fidelity-eth-reserves) [3] XRP Lawyer Sees $10K ETH Price as Ethereum ETFs Hit ... (https://coingape.com/xrp-lawyer-sees-10k-eth-price-as-ethereum-etfs-hit-2-8b/)