- ENS metrics indicated an overvalued asset and strong seller interest.
- The Fibonacci retracement levels could cause prices to move higher again.
Ethereum name service [ENS] Won 191% from January 1 to 14. It rose from $9.44 to $27.54, but has since fallen to $19.15 at the time of writing. The recent dip also brought prices below $20.5.
The Fibonacci retracement levels highlighted where ENS could likely find support next. The HTF resistance level of $20.5 was not reversed into support as prices fell below it on January 19.
The 50% level could cause a reaction
Source: ENS/USDT on TradingView
The January rally was used to chart a series of Fibonacci retracement levels (yellow). This showed that the $18.48, $16.34 and $13.29 levels were key support levels for the south. An aggressive reading of the market structure showed it to be bearish.
However, an argument can also be made that $11.6 is the more relevant low for the rally over the past two months. The RSI was also above the neutral 50, meaning momentum was in favor of buyers.
The OBV fell significantly over the past week, highlighting selling pressure.
Profit-taking could soon push prices lower
Source: Santiment
The average coin era was on an upward trend in December but was interrupted in recent weeks as prices quickly climbed higher. This meant that ENS holders likely sold their tokens, leading to the fragmented average coin age.
The supply on the fair has also increased rapidly. This indicated the likelihood of increased selling pressure as holders moved the token to centralized exchanges.
Together, these statistics suggested that the rally that ENS has been experiencing may be coming to an end.
Read Ethereum Name Services’s [ENS] Price forecast 2024-25
The MVRV ratio also reached a high not seen in two years. This was followed by a rapid sell-off and the MVRV ratio also fell. The conclusion was that the holders were eager to realize their profits.
Considering the MVRV’s high value of 30.6% despite the pullback, this was a strong indication that the token was still overvalued.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
