- ENS metrics pointed toward an overvalued asset and keen seller interest.
- The Fibonacci retracement levels might see prices rebound upward.
Ethereum Name Service [ENS] gained 191% from the 1st to the 14th of January. It rallied from $9.44 to $27.54, but has since fallen to $19.15 at press time. The recent dip also brought prices below $20.5.
The Fibonacci retracement levels highlighted where ENS could likely find support next. The HTF resistance level at $20.5 was not flipped to support, as prices fell below it on the 19th of January.
The 50% level might provide a reaction
Source: ENS/USDT on TradingView
The rally in January was used to plot a set of Fibonacci retracement levels (yellow). It showed that the $18.48, $16.34, and $13.29 levels were important support levels to the south. An aggressive reading of the market structure showed it was bearish.
However, the $11.6 could also be argued to be the more relevant higher low for the rally of the past two months. The RSI was also above neutral 50, which meant the momentum was in favor of the buyers.
The OBV dropped notably over the past week to highlight the selling pressure.
Profit-taking activity could drive prices lower soon
Source: Santiment
The mean coin age saw an uptrend in December, but it was interrupted in recent weeks, while prices rapidly climbed higher. This meant that ENS holders were likely selling their tokens, leading to the fragmented mean coin age.
The supply on exchanges metric has also rapidly climbed higher. This signaled the likelihood of increased selling pressure as holders moved the token to centralized exchanges.
Together, these metrics suggested that the rally ENS has been on might be drawing to an end.
Read Ethereum Name Service’s [ENS] Price Prediction 2024-25
The MVRV ratio also reached a high not seen in two years. This was followed by a rapid sell-off and the MVRV ratio also dived. The inference was that holders were keen to realize their profits.
Given the high value of the MVRV at 30.6% despite the pullback, it was a strong hint that the token was still overvalued.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
