Fidelity, a leading financial services provider, has recently released a report on Ethereum (ETH) that sheds light on some key metrics to watch for the cryptocurrency in the coming months.
The report highlights several important indicators, including the 50-day and 200-day moving averages (MA), the realized price, the Net Unrealized Profit/Loss (NUPL) ratio, Market Value to Realized Value (MVRV) Z-Score, percent in profit, and the Pi Cycle indicators, all of which can provide valuable insights into market sentiment and potential price movements.
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Fidelity supports Ethereum: Wall Street bets on crypto #2. Ethereum Holds Strong Above Key Support Levels
According to the report, Ethereum has been maintaining its position above crucial support levels. The realized price has been acting as a sturdy support level since January 10th. Moreover, the NUPL ratio indicates that Ethereum is presently in a neutral zone. On the other hand, the MVRV Z-Score suggests that the cryptocurrency's market value is slightly above the "fair" zone, which could potentially lead to a bull run or at least a sideways price trend, as per Fidelity. Fidelity supports Ethereum: Wall Street bets on crypto #2.
According to the report, around 66% of unique Ethereum addresses are currently in profit, which suggests that the cryptocurrency is being used for various purposes such as trading, DeFi, staking, or purchasing other digital assets. The Pi Cycle indicators, which have been a reliable cycle top indicator in the past, are currently showing that Ethereum is in a neutral zone. However, the long-term moving average following the sunken price downward may lead to more volatility in the near future. It is uncertain whether this volatility will be positive or negative and could depend on various macro factors.
ETH Adoption On The Rise
According to Fidelity's report, although the monthly active addresses and transaction count have decreased by 1%, the number of new Ethereum addresses has increased by 9% in Q2 2023. New addresses refer to unique addresses that appeared for the first time in a transaction, which provides a clearer picture of Ethereum adoption, even if it doesn't directly indicate network usage.
The report highlights two significant metrics regarding the Ethereum network. Firstly, the short-term moving average of new addresses has risen above the longer-term moving average, indicating an increase in the rate of new users joining the network. This growth can be attributed to the incentives provided by new and existing projects.
Secondly, the report notes a continuous decrease in the net issuance of new supply by the network, which has been ongoing for over five months now. This decrease is due to the burned supply from transactions since The Merge, with net issuance surpassing -700,000 Ether. The significance of this lies in the fact that as Ethereum's supply is destroyed, it increases the relative ownership level of all remaining token holders.
At present, the price of ETH stands at $1,849, which has experienced a 2% decrease in the last 24 hours. Ethereum, like Bitcoin, has also lost its 50-day MA, which is currently positioned at $1,869.
In the event of a market downturn, ETH can expect to encounter several key support levels that may help prevent a further bearish trend.
The nearest support level is located at $1,840, followed by another support level of $1,792. However, the most significant support floor is the 200-day MA, which is situated at $1,780. This will be a crucial factor in determining who will dominate in the coming months.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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