- The on-chain metrics showed that bulls were eager to go long.
- The age consumption metric indicated caution, while other metrics showed this.
The taker buy/sell ratio skyrocketed for Ethereum [ETH] the past few days. This metric tracks the relationship between the taker’s buying volume and selling volume. Values below 1 indicate bearish sentiment.
Taker refers to the nature of the order placed, being a market order rather than a limit order. This means that these traders are willing to pay a small premium to execute the trade at market prices. Therefore, this ratio helps gauge sentiment.
Ethereum on the road to recovery
On July 31, Ethereum was trading at $3.2k. Since July 20, the taker’s buy/sell ratio has been negative, indicating that bearish sentiment was dominant. After the dump on August 5, the market rebound stimulated long positions.
The metric’s peaks on August 8 and August 23, while bullish, may not be indicative of a sustainable recovery.
The flow of Ethereum from the exchanges could shed more light on this. On the 23rd, there was a massive outflow of ETH, indicating accumulation. The 14-day simple moving average has resumed the downward trend it showed after the early August price decline.
This was an encouraging sign and could push prices towards the $3k resistance zone.
Should traders expect a breakout above $3k?
The 30-day MVRV moved into positive territory to indicate short-term holders with marginal gains. The 90-day MVRV was still deeply negative. Meanwhile, the average coin age has moved higher over the past three weeks.
This indicated network-wide accumulation, reinforcing the bullish view of the netflows metric. However, the age consumed metric saw a huge spike, demonstrating increased token movement.
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The decline in the network gas fee meant that ETH supply could become inflationary over time, which could negatively impact ETH in the long term.
Such movements usually indicate a sell-off. Traders should be wary of selling pressure over the weekend and be cautious during Monday’s trading session.