Ethereum Price Faces Uncertainty: Will It Dip Below $2,600?

• Ethereum’s MVRV ratio fell below the 160-day MA, historically leading to a 40% price drop.
• ETH supply is increasing by 60,000 per month, raising concerns over price recovery.
• Key support lies between $2,230-$2,610, with 62.27M ETH held by 11.99M wallets.

Ethereum price has been in the high-risk zone as crucial on-chain data has warned of possible downside risks in the market. As a result, experts turn to historical trends and price movements to predict a further drop in prices.

The MVRV ratio has now dropped below the 160-day moving average. Furthermore, it has rendered the ETH price movement extremely sensitive.

MVRV Ratio Drops Below 160-Day Moving Average

Crypto analyst Ali Martinez pointed out that Ethereum’s MVRV ratio has dipped below the 160-day moving average. This had been a bearish signal in the past.

Last June, when the token showed a similar trend,Ethereum’s price dropped by 40%, falling from $3,500 to $2,100. The recent breach of this metric posed the risk of the Ethereum price experiencing another downturn. This may further lead to price testing at lower levels.

According to the market analyst, there was a strong support level at $2,230 and $2,610. In this zone, 11.99 million wallets cumulatively contained approximately 62.27 million ETH.

This accumulation region is a key zone where the Ethereum price could stabilize. At the same time, if support is breached, it may lead to more selling pressure. Therefore, investors and traders have been keen on price fluctuations as Ethereum struggles in volatile market conditions.

Ethereum Supply Increase Raises Concerns

More so, the continuous rise in the supply of ETH crypto has been a source of concern among the market stakeholders. In the past, analyst Benjamin Cowen pointed out that Ethereum’s supply has increased to about 60,000 ETH every month.

This increase indicated that the merger did not result in the expected decrease in supply. In addition, the surplus can put downward pressure on prices, especially if the demand does not increase at the same rate.

As more Ethereum is issued onto the market, investors worry that too much supply could hinder any potential price increases. The ever-increasing availability of Ethereum in the market concerns those who expect a major price recovery.

Critical Support Levels and Market Sentiment

Notably, the Ethereum price continued to be determined by the ability of the cryptocurrency to stay above critical support levels. The area between $2,230 and $2,610 was the level buyers had previously stacked ETH.

Further losses may be seen if the ETH price drops below this range. Moving ahead, the price of Ethereum may drop to below $2,600.

Market sentiment is still fairly neutral, with some experts enjoying the long-term trend while others worry about short-term loss. The crypto market remains sensitive to macroeconomic indicators, Federal Reserve actions, and other financial metrics.

Ethereum may also be influenced by interest rate decisions and measures that affect liquidity and investor confidence.

At press time, the Ethereum price is trading at $3,214.44, up 2.80% in the past 24 hours. The price rebounded from an intraday low of $3,128, showing bullish momentum.

Trading volume surged 22.73% to $24.2B, indicating increased market activity. Furthermore, the Ethereum price faced immediate resistance at around $3,250.

Disclaimer

In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.