Ethereum (ETH) has seen a significant price rally of 35% in the past 30 days, reaching the $4,000 mark. However, on-chain metrics suggest that a short-term price correction might be on the horizon. The price-Daily Active Addresses (DAA) divergence indicates that user engagement has decreased, potentially leading to a pullback in price. Santiment’s data shows a steep decline in Ethereum’s price DAA divergence, reaching -64.17%, indicating a drop in addresses interacting with the cryptocurrency.
In addition, the analysis of Coins Holding Time also supports this bearish sentiment. A decrease in Coins Holding Time, as reported by IntoTheBlock since December 6, suggests selling pressure on Ethereum. This metric measures the amount of time a cryptocurrency has been held without being sold, indicating that most holders might be considering selling their holdings. If this trend continues, ETH’s price could drop below the $3,900 threshold.
On the 4-hour chart, Ethereum faced resistance at $4,073, leading to a pullback to $3,985. The Cumulative Volume Delta (CVD) has also turned negative, indicating rising selling pressure in the market. If this trend persists, ETH’s price could drop to $3,788, and in a highly bearish scenario, it might even reach $3,572. However, a change in trend could lead to a potential rise towards $4,500, depending on market dynamics.
In conclusion, Ethereum’s on-chain metrics are signaling a potential short-term price correction following its recent rally to $4,000. The price-Daily Active Addresses (DAA) divergence and Coins Holding Time metrics indicate a decrease in user engagement and selling pressure, respectively. Traders and investors should monitor these indicators closely to gauge the future direction of ETH’s price movement. A drop below $3,900 or even $3,788 could be possible if the current trend continues, but a reversal could lead to a renewed push towards $4,500.
