Trading platform Kraken has warned investors about a bearish trend in the Ethereum market caused by macroeconomic events.
Cryptocurrency exchange announced on Twitter that some on-net metrics suggest a further reduction in air pressure. Kraken believes that the increase in flow indicates that the market is now in a clear bearish trend.
“Net Ether flows show that market participants are transferring ETH to exchanges, suggesting that seller demand may outpace buyer demand. If this trend continues, the price of Ether could fall as the market supply immediately increases.”
While Kraken sees signs of growing selling pressure, the cryptocurrency exchange believes Ethereum is poised for a bounce. The exchange’s report states that Ether’s market-to-real-value valuation is currently moving in “bullish territory.”
“With the value of Ether down nearly -37.5% from all-time highs, a crypto asset’s MVRV Z-score of one indicates that Ethereum is in oversold territory and is rising again. The Z-score of MVRV ETH confirms that Ethereum has entered a correction and may soon reverse the trend as ETH rarely drops so deep into the oversold zone before prices recover.
The authors of the report argue that the impact of the current uncertain macroeconomic conditions may influence the value of the cryptocurrency. Market analysts note that “healthier price action” is starting to take shape again. However, a slight bearish edge in the crypto markets remains in place as Ethereum is currently more risky than Bitcoin.
“The data is currently painting a slightly bearish picture. An indicator such as a change in the net position on the exchange shows that market participants are ready to transfer BTC and ETH from long-term ownership to market supply. The change in the net exchange position for BTC is + $13.5 million over the past 30 days. The repositioning of ETH tells a similar story, although the bearish momentum seems to be greater than that of BTC. Ethereum net position change over the last 30 days is +$874.5 million. However, the bearish momentum for BTC is slowing down while for ETH it is the other way around.”
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