How profitable is Ethereum in the current market
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How profitable is Ethereum in the current market

Bitcoin’s recent 34.4% rally has stabilized the market after nearly a month of a consolidated downtrend, and this rally has also affected Ethereum. As far as altcoins are concerned, they are supposed to follow Bitcoin’s lead, so they should be growing as well at the moment. However, while Ethereum followed BTC and jumped in value, at this point it looks like it is reaching consolidation again. Where is ETH going?

Ethereum is consolidating again

After registering 28.8% growth last week, ETH began to show signs of a slight slowdown on July 27. Despite the increase in the number of transactions, exchange activity did not show any significant differences in terms of the receipt and withdrawal of ETH from exchanges, as the trend of the outflow of funds continues. Even the derivatives market saw a slowdown as futures volumes suddenly plummeted.

Ethereum futures volume | Source: Glassnode – AMBCrypto

Futures volumes reached $ 43 billion 48 hours ago and returned to $ 28 billion on July 27. In addition, the volume of short transactions in futures, which rose by $ 81 million, fell by $ 60 million yesterday. These are all signs that these ups and downs were the result of a sudden boom in investor sentiment, coupled with the hype generated by the weekly rally. This marks a correction phase for Ethereum.

Is Ethereum still a good option?

Despite the drop in activity, Ethereum, judging by many indicators, is still in demand. First, cryptocurrency is still a profitable asset. Relative unrealized losses have prevailed in the market since early July, but this has changed with the gains this week. Profits are currently rising and losses are falling sharply, which is naturally a good sign for investors. The supply in profit also significantly exceeds the supply at a loss at the moment.

Ethereum’s unrealized gains prevail over losses | Source: Glassnode – AMBCrypto

Finally, the MVRV (Market Value to Realized Value) ratio, which determines whether a coin has fair value or not, has risen significantly but continues to be in a downtrend macroeconomic trend. For Ethereum to declare an absolute bull market, this indicator must break this downtrend.

Ethereum MVRV in a downtrend | Source: Glassnode – AMBCrypto

All things considered, ETH is not yet a compelling case for a bull run.

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