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Research firm Santiment has warned investors about the high risk of a fall in the price of the Ethereum (ETH) cryptocurrency.
Employees of the company predict a bearish trend based on the dynamics of the MVRV indicator, which is calculated by dividing the market value of an asset by its realized price. According to the company, MVRV began to grow rapidly at the end of February. This fact greatly increases the likelihood of liquidating trading positions for profit.
MVRV Ethereum Fluctuations in Seven Days
MVRV ETH for seven days, which measures the amount of short-term profit or loss of cryptocurrency holders, suggests that the market is in a dangerous zone, and the indicator has reached a peak in the last three months. According to historical data, this means that short-term hodlers will sell some of the coins in order to fix the profit, Santiment specialists noted.
The price of Ethereum collapsed by 29% after the previous time MVRV rose to the danger zone in mid-December 2021. If this situation repeats, then the altcoin rate may fall to about $ 2,000. Santiment experts believe that the decrease in the price of ETH will benefit the market and create a springboard for a reversal.
At the time of writing, Ethereum is trading at $2,600.
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