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ETH Sharks are on Accumulation Spree, but how Long will it Take for Bubble to Burst?

Santiment stated in a tweet on January 12 that sharks had amassed a substantial sum of Ethereum [ETH] during the previous two months. This caused ETH prices to skyrocket. The pattern of major holders accumulating ETH may also have an impact on overall market sentiment and prices.

Glassnode data shows a surge in interest from addresses owning more than 10 ETH over this time period. Furthermore, the number of profitable addresses reached a one-month high of 49,079,396.702.

According to data from MAC D on Crypto Quant, this abrupt rise in Ethereum prices could represent a bubble. Two signs indicate that the current market is overbought. The first indicator is the Short Term Holder SOPR, which gauges short-term investor mood.

When the overall trend is declining, a value greater than or equal to one implies that short-term investors are profiting. As a result, huge holders, or “whale investors,” stand to profit. This indicator’s current value is 1.007.

The ETH dominance index, which evaluates Ethereum’s relative strength in comparison to other cryptocurrencies such as Bitcoin, is the second indicator. A gain in the index of more than 20% indicates that altcoins are increasing excessively in comparison to Bitcoin, which might be seen as a hint of a bubble. A modest decline in the value of Bitcoin might have a huge influence on the market.

The rising MVRV ratio is another indicator of rising selling sentiment. Because of the expanding MVRV ratio and the growing long/short disparity, many short-term Ethereum holders could profit by selling their ETH. This could put more pressure on Ethereum.

One reason traders placed short bets on ETH could be the increasing selling pressure. According to Coinglass data, the amount of short positions placed against Ethereum has increased significantly in recent days, with 60.16% of traders shorting Ethereum at the time of writing.

At the time of publication, the price of Ethereum was $1,399.74. According to CoinMarketCap, ETH has increased by 4.80% in the previous 24 hours.

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.