Ethereum [ETH] might not be ready for a serious rally yet; here’s why

Ethereum [ETH] is taking a bit of a breather after the cryptocurrency market’s extended downward spiral. The altcoin king dropped below $1,000 for the first time since January 2021 between 18 June and 19 June.

Although ETH has recovered slightly above the $1,000 price level, concerns that the bears might continue their assault still exist, thus pushing prices even lower. On the other hand, the latest lows have sparked optimism that ETH may have bottomed out and might achieve more upside in the coming days.

Signs of the times

ETH’s supply metric reveals that whales jumped on the accumulation bandwagon as the price of the altcoin tumbled. Its supply distribution by the balance on addresses revealed that different whale classes have been buying the dip. For example, whales holding between one million and 10 million ETH increased their holdings from 10.7% on 14 June to 11.09% by 21 June.

Source: Santiment

Whales holding between 100,000 and one million ETH also increased their holdings from 21.14% on 15 June to 21.74% on 21 June. Furthermore, the ETH supply distribution by the number of addresses revealed that six addresses held between one million and 10 million ETH in the first half of April but one sold their holdings on 17 April, leaving five whales in the market. However, the number went back to six whales on 14 June.

ETH’s exchange flow metrics reveal that it currently has a higher net outflow. Its exchange outflow volume of 408,173 ETH is notably higher than the 366,756 ETH it recorded as its exchange inflow volume.

Source: Glassnode

Despite the observation given above, the number of ETH accumulated represents a very small percentage of the total ETH in circulation. ETH’s supply on exchanges is still at its highest levels in the last three months. The daily active addresses of ETH have decreased significantly in June as compared to May and the total supply held by whales is close to its three-month lows.

Source: Santiment

The MVRV ratio’s recent uptick reflects the buying that took place near ETH’s latest local lows. This means those that bought at the bottom are already in profit, thus pushing up the ratio.

ETH’s metrics suggest that there is some demand at its current price level. However, it is not enough for a major price move. This is due to the lack of a catalyst and investors are also waiting for the market conditions to improve.

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