Trading platform Kraken warned investors of a bearish trend in the ether market caused by macroeconomic developments.
The cryptocurrency exchange announced on Twitter that some intra-network indicators suggest further downward pressure on ether. Kraken believes that the increase in flows suggests that the market is now in a clear bearish trend.
“Net ether flows show that market participants are moving ETH to exchanges, suggesting that seller demand may be outpacing buyer demand. If this trend continues, the price of ether could fall as market supply increases immediately”.
While Kraken is seeing signs of increasing seller pressure, the cryptocurrency exchange believes that ether is poised for a rebound. The exchange said in a report that estimates of ether’s market value to real value are currently moving in “bullish territory”.
“As ether’s value has fallen nearly -37.5% from its historical highs, the crypto-asset’s Z-score MVRV of one indicates that ether is in “oversold” territory and rising again. ETH’s MVRV Z-score confirms that ether has entered a correction and could soon reverse trends back up, as ether rarely falls that deep into oversold territory before prices recover,” the report says.
The report’s authors argue that the impact of the current uncertain macroeconomic conditions could affect the cryptocurrency’s value. Exchange analysts note that a “healthier price movement” is starting to take shape again. Nevertheless, a slight “bearish advantage” in cryptocurrency markets remains in place as Etherium is currently at greater risk than Bitcoin.
“The data currently paints a slightly bearish picture. A metric such as change in net exchange position shows: market participants are willing to move BTC and ETH from long-term holdings to market supply. The change in the net exchange position of BTC is +$13.5 million over the last 30 days. ETH’s position change tells a similar story, although the bearish momentum seems to be greater than BTC’s. Ether’s net position change over the last 30 days is +$874.5 million. However, the bearish momentum for BTC is slowing, while the opposite is true for ETH.”