The recent 34.4% rally that Bitcoin hit stabilized the market after nearly a month of a consolidated downtrend, and the rally was also reflected on Ethereum. Altcoins are believed to be following Bitcoin’s lead, so for now they should go up as well. However, while Ethereum followed BTC and jumped in value, for the moment it appears to be regaining consolidation. Where is ETH going?

Ethereum in consolidation again

After rising 28.8% last week, ETH showed signs of a slight slowdown on July 27th. Despite the increase in the number of transactions, exchange activity has not shown a significant difference in terms of ETH switching in and out of the exchanges as the trend in outflows continues. Even the derivatives market saw a slowdown when futures volumes suddenly plummeted.

Ethereum futures volume | Source: Glassnode – AMBCrypto

Futures volumes hit $ 43 billion 48 hours ago and were back down to $ 28 billion on July 27th. Additionally, futures short liquidations, which were up $ 81 million, declined $ 60 million yesterday. All of these are signs that these rises and rallies were the result of a sudden boom in investor sentiment along with the hype of the week’s rally. This marks a correction phase for Ethereum.

Is Ethereum Still a Good Option?

Despite the decline in activity, Ethereum still seems to be in demand according to a lot of metrics. First, cryptocurrency is still a profitable asset. Relative unrealized losses have dominated the market since early July, but that changed with this week’s rally. Currently, profits are rising while losses are falling sharply, which of course is a good sign for investors. The supply in profit is also currently significantly higher than the supply in loss.

Ethereum unrealized gains dominate the losses | Source: Glassnode – AMBCrypto

Eventually, the MVRV (Market Value to Realized Value) ratio, which determines whether the coin has fair value or not, increased significantly but is still in a macroeconomic downtrend. In order for Ethereum to be able to declare an absolute upward market, this indicator has to break through this downward trend.

Ethereum MVRV in a downtrend | Source: Glassnode – AMBCrypto

All in all, ETH still has to provide a strong argument for a bull run.


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