On-chain indicators and fundamental developments are a glimmer of hope for most ETH holders in 2021. Whenever the price has fallen, speculators have paid attention to its consistent functioning.

ETH has been at the forefront of many crypto innovations over the years, taking the space to new heights and getting the recognition it deserves. As if that wasn’t enough, is it important to understand and compare whether or not these developments in the chain are helping the price recover?

Indicators on the chain of the ETH: establish bottom?

Much has been written lately about a number of indicators that are currently being retested, suggesting the possibility that they may have bottomed out and are bottoming out.

ETH price (green) and average fees (purple) on Ethereum | Source: Santiment

For now, one of the network charges-related headaches is also being resolved. The Ethereum network currently has the lowest transaction fees since January 2021. This can result in more users returning to the network more frequently. While low fees are a good sign, it also shows that Polygon and Binance Smart Chain are taking over some of Ethereum’s activities.

However, users continue to store value on this network so its importance won’t wear off anytime soon.

level via the Ethereum network | Source: etherscan.io

In addition, the usage of the Ethereum network remains high and the price correction action has not changed direction. Hence, the value of ETH will be safe and healthy in the long run Technically it is.

Still, investors are often fickle individuals, so short-term price movements are also important to their growth. This is where derivatives traders come in.

Yesfactor change the balance

Most traders trade in and out strategies so their effects on the market are also evident. So when the market falls sharply and liquidates, they also play an important role in the recovery.

So far, however, this has not been the case for ETH.

Latent (green) and real (red) 3-month daily volatility of ETH / USD | Source: Skew

According to Skew, the real volatility of ETH is more dominant than the underlying volatility, which indicates a cooling off period. From a short-term bullish perspective, this may not be good news. Volatility in general has pushed the market down and the possibility of a rebound is also unpredictable.

Accordingly, the current options traders are nervous and faltering.

ETH option volume | Source: Skew

Much of the option volume is also placed under the put contract, but price expectations are very limited. An important conclusion to be drawn from this is that these traders have a huge impact on short-term price movements.

There is no certainty for the market as conditions drag on with no clear direction. Currently, the likelihood of ETH climbing to its previous ATH level is 5% lower in June, so a move to increase volatility is definitely needed as improvements in the chain cannot be triggered.

How attractive is ETH currently??

The possibility of the ETH price rising to $ 6,000 is a story based on its growing market share and capitalization. At the time of writing, the altcoin is still trading at around $ 2,800 and has a market cap of about $ 322 billion. Combined with EIP 1559 and the transition to PoS, it is likely that Ethereum’s market share will also increase, especially when compared to Bitcoin.

ETH market capitalization vs. Bitcoin | Source: Twitter

According to the graph, ETH’s market capitalization is 48% that of Bitcoin. The above percentage is expected to increase in the future, suggesting that ETH’s upward trend may be slow but not stopping. In fact, the spot volumes of ETH / BTC in terms of the total daily volume alone have been on average since May 26, 2021.

Total daily spot volume of ETH / BTC spot | source: Crookedness

As can be seen from the graph, the trading volume of ETH has recently decreased compared to most of May 2021. In the same period, however, the trading volume of OI (Open Interest) and futures increased. After the flash crash on May 19, ETH recovery was slow. With upcoming updates and an increasing volume of ETH, the upward trend seems to be continuing.

On top of that, the concentration of the big HODLers is 41% and once the metrics return to similar profits, this altcoin will likely rise higher.

Additionally, nearly 92% of HODLers are profitable at the time of writing, and a price move above $ 3,000 is likely to push that number higher. The share of the ETH offering on the stock exchanges continues to decline and this should accelerate the recovery.

In addition, the price increases in relation to the social volume. While the selling pressure increased somewhat thanks to a changed composition of HODLer, the selling pressure was absorbed by the increasing demand on the stock exchanges. It is currently a long-term concern that large investors reduce accumulation. However, based on a few previous cases, ETH’s high ROI is likely to drive constant demand and support the upward momentum.

Short-term ROI | Source: Messari

According to ETH ROI data, the change from BTC in the last 90 days is more than 130%. Hence, because of the short-term ROI, traders are drawn in and buy ETH. The ROI has been negative for the last month and could cause prices to stall, adding to selling pressure. However, this will change if staking continues on the network before the next update.

Minh Anh

According to AZCoin News

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