The recent decision by the Federal Reserve to keep interest rates steady has had a positive impact on the crypto market. With interest rates remaining at 4.25% to 4.50%, investors are finding crypto assets more appealing. As a result, the market is experiencing a surge, with Bitcoin reaching $100,000 and Ethereum also seeing an increase in value. However, experts are warning that STHs (Strong Hands) may soon start selling to take profits, as indicated by a decline in key on-chain activity that could signal a price reversal.
ETH’s MVRV Ratio is a key indicator to watch for a potential market reversal. The recent surge in the crypto market has seen Bitcoin surpass the $100,000 mark and Ethereum rise above $2,000. However, Coinglass reported over $175 million worth of Ethereum positions being liquidated, with sellers seeing $148 million in forced liquidations. Despite this, Ethereum’s price increase has led to an 18% jump in open interest, totaling $24.8 billion.
The surge in Ethereum’s price can be attributed to increased interest from large investors since April, with money flowing into Ether-based ETFs for two consecutive weeks. Additionally, the Pectra upgrade launched on May 7 has also played a role in boosting the price of Ethereum.
However, data from IntoTheBlock shows that the MVRV ratio has dropped to 0.888, indicating that many investors are selling at a loss despite rising prices. This could lead to panic selling and a potential market downturn. Despite this, major players such as Wintermute and Abraxas Capital are making significant purchases, suggesting that smart money is still active in the market.
Looking ahead, sellers are struggling to push Ether below its moving averages, indicating strong support for the upward rally. As of writing, ETH is trading at $2,048, up over 13% in the last 24 hours. Buyers are holding the price around immediate resistance levels, with the potential to break through and head towards $2,500. However, if sellers manage to drag the price below moving averages, ETH could drop to $1,734, with key support at $1,542.
With the RSI trading in the overbought region at level 78, ETH price may be due for a short-term correction. Overall, the crypto market is experiencing a surge, but caution is advised as potential price reversals could be on the horizon.