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What is making investors cautious about Ethereum

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Ethereum made significant gains less than 24 hours ago after the altcoin climbed from $1788 to $1995 in 1 day. This 11.7% hike brought the dying hopes of Ethereum investors back to life. While many looked at this as an opportunity to make gains, others were of the opinion that the long-term picture was the opposite of that.

These are some key metrics to help understand why the ETH investor community is still slightly cautious.

Ethereum UNDER stress

Not only is ETH under stress, but also under the 2021 higher low which stood as its last defense on the charts. What should have been the support is currently acting as resistance for the cryptocurrency and for any hopes of recovery, ETH needs to reclaim it and reclaim it soon. A weekly close above the higher low will kickstart ETH’s northbound movement once again. 

Further, ETH has been consistently undervalued for a long time now. The MVRV ( Market Value to Realized Value) ratio displays how valued an asset is and ETH, at press time, continued to be undervalued. After dropping from the highs of May, the metric has struggled to pull the indicator back up. This is a testament to how the investors and market conditions dictate the value of an asset. 

Ethereum MVRV Ratio | Source: Glassnode – AMBCrypto

But, what about profits?

At the moment, Ethereum does not seem to be very profitable as it continued to maintain its movement under the neutral line. Despite a couple of spikes here and there, for the most part since late May, the Spent Output Profit Ratio has been weak. This is a bearish sign for the market, a finding that makes investors wary about the health of ETH.

Ethereum SOPR | Source: Glassnode – AMBCrypto

Finally, a direct investor sentiment report underlined that even after yesterday’s hike, the average sentiment was still bearish. In fact, the indicator had been dropping already and it later continued to do so with no explicit indication of a trend reversal. Considering this, it becomes very clear what the feelings towards ETH are at the moment. 

Ethereum Average Sentiment | Source: Santiment – AMBCrypto

These metrics are, in a way, the sum of market movement as well as investor sentiment. Thus, a change in their positions might bring the change that the Ethereum market needs.


Aaryamann is a freelance crypto journalist working with AMBCrypto. He is currently investing his time in the crypto-space. He has a keen interest in DeFi, the ever-expanding possibilities of blockchain technology, as well as the political impact they would have.
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