Ethereum (ETH) is trying to break out of the downtrend that has dropped the price of the cryptocurrency below $3 thousand. However, Investors still believe in the potential for Ethereum (ETH) to recover as the overall crypto market trends change.
Ethereum investors are optimistic
ETH holders are positive – they prefer not to sell their coins, which is evident from the decrease in the number of active deposits. This on-chain metric shows addresses that transfer their assets from the wallet to exchanges. It usually rises when investors are looking to sell. The increase in the number of such deposits indicates growing pessimism.
In the case of Ethereum, the indicator did not just decline – it reached an eight-month low. This means that holders are not particularly eager to sell now.
Secondly, the net unrealized profit/loss (NUPL) ratio dropped below 0.5 in early April and is currently above 0.4. This indicator is used to analyze the total profit or loss that investors would experience if they were to sell an asset at current prices.
Although profits have declined, investors are still hopeful of a recovery. Historically, NUPL’s fall into this zone has been followed by lengthy corrections and large-scale rallies. If the situation repeats itself again, this could give the price of Ethereum a boost.
ETH Forecast: Waiting for a Breakout
At the time of writing, the Ethereum price remains below $3000. ETH is stuck in a descending wedge and is waiting for a breakout of the upper boundary of this pattern, which coincides with the $3 thousand level.
Turning this level into support is extremely important, and given the desire of investors for price growth, such an outcome is quite likely. A breakout will also allow ETH to head towards $3,280. A recovery above this level will help the token launch a recovery.
On the other hand, a fall to $2,800 and a breakout of the lower boundary of the pattern would indicate a predominance of bearish signals. This could send ETH towards $2,600, neutralizing the bullish signals.
