• ETH is down 33% since its all-time high, with traders buying the dip

  • Ether, the native currency of the Ethereum network and the second-largest digital asset by market cap, has seen its market value decrease by 33% since its all-time high on November 10th. Ether’s market value, in particular, has taken a significant knock in the last 24 hours, falling by almost 10%.

    ETH appears to have bottomed out slightly above $3,100 on Friday morning UTC at the time of writing. Every trader is wondering whether this is the bottom. According to market sentiment data and ether’s average MVRV, this is the greatest “pain” traders have felt since July last year, when price rose 118 percent from that pain peak.

    MVRV appears to be bullish.

    The market-value-to-realized-value (MVRV) ratio compares an asset’s market capitalization to its realized capitalization. MVRV can be used to determine when a price is above or below “fair value,” as well as to analyze market profitability, by comparing these two variables. Extreme variances between market value and realized value can be used to indicate market tops and bottoms since they reflect periods of extreme unrealized profit and loss for investors, respectively.

    Another favorable sign is the ratio of active Ethereum addresses to the ETH asset price. As the asset price falls, the number of active addresses increases, indicating that more market participants are engaged in the downturn market, probably purchasing the dip and maybe stabilizing the market.

    The year of the merger is 2022.

    The opening days of 2022 do not appear promising for ETH, as the entire market is falling, although the assets performed admirably in 2021. Last year, the market value of ether increased by almost 450 percent, reaching an all-time high of $4878 on November 10th. Ether is still up over 170 percent year on year.

    For Ethereum, 2022 is the year of the Merge, when the blockchain’s consensus process shifts from Proof-of-Work to Proof-of-Stake. So far, everything is going as planned, but this is likely to be a make-or-break moment for the Ethereum system. It’s anyone’s judgment whether the merger is priced in.

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