- Ethereum’s on-chain metric flashed a bullish sign on the charts
- However, key technical indicators suggested that the coin’s price may fall further.
Ethereum’s [ETH] Age Consumed metric climbed to a one-month high on 18 April. This rally was followed by a slight uptick in the altcoin’s value too, suggesting that a local bottom might have been hit, according to Santiment’s data.
Source: Santiment
Is the bottom in or not?
To assess whether a price bottom is in, it is important to assess ETH’s Age Consumed metric. This metric tracks the movement of its long-held idle coins. It is regarded as a good marker for local tops and bottoms because long-term holders rarely move their dormant coins around. Therefore, whenever this happens, it often results in major shifts in market trends.
Whenever this metric spikes, it indicates that a significant number of previously held idle tokens have begun to change hands. It hints at a strong shift in the behavior of long-term holders.
On the other hand, when an asset’s Age Consumed dips, it means that long-held coins remain in wallet addresses without being traded.
In fact, according to Santiment, Ethereum’s Age Consumed rose to a high of 1.6 million on 18 April. Although ETH’s price briefly fell below $3,000 after this, it quickly rebounded to exchange hands at $3,059 at press time.
Since 18 April, the crypto’s value has risen by 3%, according to CoinMarketCap.
Why caution is necessary
While ETH’s Age Consumed hinted at the possibility of an uptrend, an assessment of the coin’s price movements on the 1-day chart revealed that the short-term outlook remains significantly bearish.
Underlining that bearish power exceeded bullish activity in ETH’s market, its positive directional index (green) rested under its negative index (red).
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When these lines of an asset’s Directional Movement Index (DMI) are positioned this way, it is a sign that the market trend is bearish and the price is under significant pressure from the sellers.
Additionally, readings from the ETH market’s moving average convergence/divergence (MACD) indicator confirmed the prevailing bearish trend, with the MACD line below its signal and zero lines.
Source: ETH/USDT on TradingView
When these lines are positioned this way, it indicates a strong bearish trend in the market and confirms the possibility of a further decline in an asset’s price.
Market participants often see it as a signal to exit long positions and take short ones. Simply put, it might be a tricky time to navigate Ethereum’s market right now.