The Bit price (ETH) has just for the first time crossed the $4,000 USD mark since March 2024, marking a 25% increase in the past 30 days. However, the current 7D MVRV ratio of -1.35% shows that short-term holders are currently in unrealized losses, forecasting the possibility of further declines before recovery.
Historically, ETH typically recovers after the MVRV drops to -4% or lower, in tandem with the accumulation of "whales", as the number of addresses holding at least 1,000 ETH has steadily increased throughout December. While ETH is facing a critical resistance level at $3,987 USD, breaking through it could lead to the $4,100 USD level and beyond, but the appearance of bearish signals from converging EMA lines could challenge the $3,500 USD support or lower.
The 7D MVRV ratio suggests ETH may dip before a sharp rise
The 7D MVRV ratio of ETH has dropped to -1.35%, down from 3.32% on December 16, indicating that on average, short-term holders are currently in unrealized losses. Negative MVRV values often imply a highly pessimistic market, typically reflecting an oversold condition.
This may create an environment where the downside risk is reduced, and the likelihood of a recovery increases as the undervalued condition attracts renewed buying interest.
The 7D MVRV measures the average profit or loss of ETH Tokens moved in the past week compared to the current market price. Historically, ETH's 7D MVRV has tended to drop to around -4% or below -5% before major price recovery rallies occur.
This pattern suggests that while there may be further downside potential, Ethereum may soon reach levels that have historically triggered accumulation, potentially setting the stage for a price recovery.
Ethereum whales are accumulating again
The number of addresses holding at least 1,000 ETH has steadily increased throughout December. On December 1, there were 5,580 such addresses, up from a three-month low of 5,524 on October 30.
This number has since risen to 5,612, reflecting consistent accumulation by large holders, or "whales", over the past month.
GlassnodeMonitoring the activity of "whales" is crucial as these large holders can significantly influence market trends. The increase in the number of whales suggests growing confidence among major investors, often seen as a bullish signal.
This consistent accumulation may imply that "whales" anticipate positive price developments for ETH in the near future, as their actions typically precede or contribute to upward price momentum.
ETH Price Forecast: Can it retest $4,000 USD in December?
The Bit price is currently trading between the resistance level at $3,987 USD and the support level at $3,763 USD. If the resistance is broken, the ETH price could rise to test the $4,100 USD level, and with additional momentum, it could reach new highs near $4,800 USD or $4,900 USD.
These price levels represent key targets for continued upside if the buyers regain control.
However, the converging EMA lines are signaling potential weakness in the trend. Combined with the 7D MVRV, this suggests that further corrections may occur, and the ETH price could face downward pressure.
If the short-term EMA crosses below the long-term EMA, a bearish signal, the ETH price could retest the $3,500 USD support level. If this level is not held, the price could drop further, potentially reaching $3,256 USD.
