Ethereum (ETH) has recently demonstrated formidable strength, with its price steadily increasing. Recent on-chain insights paint a promising picture, suggesting a bullish trend that could see ETH price breaking a new all-time high.
However, other metrics show that a correction could happen before that if the support zone is not strong enough. Will ETH continue its uptrend, or is a correction imminent?
Ethereum Relative Strength Index Is Rising Fast
Over the past month, the RSI (Relative Strength Index) for Ethereum has seen a notable increase from 73 to 82. This rise in the RSI is a sign that Ethereum has been experiencing strong buying pressure. Traditionally, an RSI value above 70 indicates that an asset may be getting overbought, which can be a precursor to a potential pullback as the market seeks to correct and find equilibrium. However, a mere high RSI isn’t always a reliable harbinger of a downturn.
RSI is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100 and is typically used to identify overbought or oversold conditions in a trading asset.
High RSI merits caution but isn’t always a predictor of price drops. Historically, ETH prices have risen despite high RSIs, defying expected market corrections.
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NUPL Indicator Climbs Rapidly in One Week
Between February 27 and February 28, the ETH Net Unrealized Profit/Loss (NUPL) indicator shifted from the ‘Optimism – Anxiety’ stage to the ‘Belief – Denial’ level. This shift suggests that most ETH holders are now in profit. It usually signals a bull market gaining momentum as investors maintain solid trust in their assets without overzealous behavior.
The NUPL is a measure that calculates the difference between the unrealized gains and losses among all on-chain entities. It’s a gauge to assess if the network’s participants are predominantly in profit or loss at the moment. It reached the ‘Belief – Denial’ status, going from 0.51 on February 28 to 0.57 on March 10, it became pretty stable between March 6 and March 10.
The NUPL metric grew fast, meaning its status could soon change from ‘Belief – Denial’ to the ‘Euphoria – Greed’ category. This can imply an overly optimistic market, with most investors enjoying profits. Historically, this sentiment has been a precursor to a market peak, potentially leading to a correction as more investors are tempted to cash in on their gains.
ETH Price Prediction: Can it Reach $5,000?
ETH price is still 17% below its all-time high of $4,867.17, reached on November 10, 2021. Prices between $3,790 and $3,910 areas might act as support zones, where the price could potentially stabilize due to a concentration of holders seeing their positions remain profitable.
The In/Out of the Money Around Price (IOMAP) is a metric that represents where holders will likely profit or lose. It maps out the price points where investors purchased varying quantities of tokens and compares them to the current price.
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The two highest resistance levels must be broken at $4,035 and $4,274 to achieve a new all-time high ETH price. If it can do this, this could trigger a strong rise to $4,900 and even $5,000, a new historical record.
The correlation between BTC and ETH prices can also trigger this. Since BTC has reached a new all-time high recently, this could also push ETH higher in price. Other movements could also positively impact ETH prices, such as approving an ETH ETF that is inevitably coming soon.
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