Ethereum [ETH] may not be ready for a serious rally yet; here’s why

Ethereum [ETH] is taking a breather after the crypto market’s expanding downward spiral. The altcoin king dropped below $1,000 for the first time since January 2021 between June 18 and June 19.

Although ETH is recovering slightly above the $1,000 price level, there are still concerns that bears may continue their attack, thus pushing prices further down. On the other hand, the recent dips have fueled optimism that ETH may have bottomed out and could go higher in the coming days.

Signs of the times

ETH’s supply metric reveals that whales jumped on the accumulation bandwagon as the price of the altcoin tumbled. Its supply distribution by the balance on addresses revealed that different whale classes have been buying the dip. For example, whales holding between one million and 10 million ETH increased their holdings from 10.7% on 14 June to 11.09% by 21 June.

Whales with 100,000 to one million ETH also increased their holdings from 21.14% on June 15 to 21.74% on June 21. Also, the ETH supply breakdown by number of addresses revealed that six addresses held between one million and 10 million ETH in the first half of April, one of them sold their holdings on April 17, leaving five whales in the market. However, the number returned to six whales on June 14.

ETH’s exchange flow metrics reveal that it currently has a higher net outflow. Its exchange outflow volume of 408,173 ETH is notably higher than the 366,756 ETH it recorded as its exchange inflow volume.

Despite the observation given above, the number of ETH accumulated represents a very small percentage of the total ETH in circulation. ETH’s supply on exchanges is still at its highest levels in the last three months. The daily active addresses of ETH have decreased significantly in June as compared to May and the total supply held by whales is close to its three-month lows.

The MVRV ratio’s recent uptick reflects the buying that took place near ETH’s latest local lows. This means those that bought at the bottom are already in profit, thus pushing up the ratio.

ETH’s metrics suggest that there is some demand at its current price level. However, it is not enough for a major price move. This is due to the lack of a catalyst and investors are also waiting for the market conditions to improve.