What is causing investors to be wary of Ethereum?

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Ethereum made significant gains less than 24 hours ago, rising from $1788 to $1995 in a single day. This 11.7 percent increase resurrected Ethereum investors’ dying hopes. While many saw this as an opportunity to profit, others believed that the long-term picture was the polar opposite.

These are some key metrics that can help explain why the ETH investor community is still cautious.

Ethereum UNDER stress

Not only is ETH under pressure, but it is also below the 2021 higher low, which served as its last line of defence on the charts. What should have been support is now acting as resistance for the cryptocurrency, and for any hope of recovery, ETH must reclaim it quickly. A weekly close above the higher low will re-ignite ETH’s upward movement.

 

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Furthermore, for a long time, ETH has been consistently undervalued. The MVRV (Market Value to Realized Value) ratio shows how valuable an asset is, and ETH was still undervalued at the time of publication. After falling from May highs, the metric has struggled to bring the indicator back up. This demonstrates how investors and market conditions influence the value of an asset.

Ethereum MVRV Ratio | Source: Glassnode – AMBCrypto

But, what about profits?

At the moment, Ethereum does not appear to be very profitable, as it has maintained its movement below the neutral line. Despite a few spikes here and there, the Spent Output Profit Ratio has been weak for the most part since late May. This is a bearish indicator for the market, and it makes investors concerned about the health of ETH.

Ethereum SOPR | Source: Glassnode – AMBCrypto

Finally, a direct investor sentiment report revealed that, despite yesterday’s increase, the average sentiment remained bearish. In fact, the indicator had already begun to fall, and it has since continued to do so with no explicit indication of a trend reversal. Given this, it is clear what people’s attitudes towards ETH are at the moment.

Ethereum Average Sentiment | Source: Santiment – AMBCrypto

In some ways, these metrics are a combination of market movement and investor sentiment. As a result, a shift in their positions could bring about the change that the Ethereum market requires.

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