Ethereum Open Interest Drops in April: On-Chain Metrics Point to Possible Uptrend
Ethereum, the second-largest cryptocurrency by market capitalization, has been experiencing a rollercoaster ride in the past few weeks. After reaching a high of $3.7k in April, Ethereum saw a significant drop in Open Interest, indicating a possible downtrend. However, on-chain metrics suggest that there is still hope for an uptrend.
Despite trading at $3.2k at press time, Ethereum has been struggling to maintain its momentum. The breach of the $3k psychological level multiple times has weakened sentiment among investors. The drop in Open Interest behind ETH further fueled speculation of a potential downtrend.
Looking back at the previous bull run in February 2021, similarities can be drawn to the current situation. The drop in Open Interest from $10 billion to $7.17 billion in April could be seen as a reset in the futures market. While a V-reversal is possible, the selling pressure behind Bitcoin adds uncertainty to the market.
User adoption has also taken a hit alongside prices and sentiment. The weighted social sentiment has been mostly negative since the price correction in mid-March. Additionally, network growth has slowed down in the past three months, indicating a lack of demand.
Despite the challenges, on-chain metrics show signs of optimism. The 90-day mean coin age has been trending higher, indicating network-wide accumulation of ETH. The 30-day MVRV ratio has been negative for nearly a month, presenting a buying opportunity for investors.
If Ethereum can climb back above the $3.3k resistance level, it could signal a potential uptrend. This would boost confidence among traders and investors, leading to continued gains for the altcoin king. Stay tuned for more updates on Ethereum’s price movements and market trends.
