Ethereum price drops as MVRV and active addresses ratio rise

Ethereum price pulled back on Boxing Day as gains made during the Santa Claus rally were erased.

Ethereum (ETH) token fell over 5.6% from this week’s high to $3,340. This decline occurred as a red wave spread across the crypto industry, with the market cap of all cryptocurrencies falling to $3.29 million.

Ethereum crashed in a low-volume environment as most traders stayed away from the market during the Christmas holidays. CoinGecko data shows 24-hour volume dropped to $17.5 billion from $24 billion the day before. It saw its lowest volume in more than a month.

Ethereum futures open interest also continued to decline, falling from this month’s high of $28 billion to $26 billion. A decline in open interest is a sign that demand is falling among futures traders.

Still, there are some positive signs in the Ethereum market. Data from DeFi Llama shows that the total value locked in the DeFi ecosystem increased by 5.50% in the last 30 days. Solana and Tron’s TVL dropped over 3% during this period.

The active address rate has continued to increase over the last few months. It rose from October’s low of 0.37% to 0.57%, its highest level since August. This important data point looks at the ratio of active addresses to outstanding balances. Total active Ethereum addresses increased to over 927,000.

Ethereum active addresses | Source: IntoTheBlock

Further technical data shows that Ethereum’s Market Cap to Real Value score increased by 2.35% to 1.64 in the last 24 hours. This important number looks at whether a crypto asset is overvalued or undervalued. An MVRVA figure of less than 3.8 indicates that an asset is relatively undervalued.

Ethereum MVRV indicator | Source: IntoTheBlock Ethereum price analysis ETH price chart | Source: crypto.news

The daily chart shows that ETH price formed a minor double-top pattern at $4,095, followed by a strong bearish trend. It later recovered and retested the formation’s neckline at $3,500, the December 3 low.

ETH formed a small doji candlestick pattern on Christmas day. Doji consists of a small body and long upper shadows and is usually a bearish sign. Ethereum also formed a bearish flag chart pattern.

Therefore, the cryptocurrency will likely experience a bearish breakout and reach the psychological point of $3,000, 10% below the current level.

Disclosure: This article does not constitute investment advice. The content and materials on this page are for educational purposes only.