Fidelity supports Ethereum: Wall Street’s top players bet on the second largest cryptocurrency

Fidelity supports Ethereum: Wall Street's top players bet on the second largest cryptocurrency

The State of the Ethereum Blockchain: Insights from Fidelity’s Report

Fidelity, a prominent financial services provider, recently published a comprehensive report on Ethereum (ETH), shedding light on key metrics to watch in the cryptocurrency’s market. The report introduces several important indicators that provide valuable insights into market sentiment and potential price movements. These indicators include the 50-day and 200-day moving averages (MA), the realized price, Net Unrealized Profit/Loss (NUPL) ratio, Market Value to Realized Value (MVRV) Z-Score, percent in profit, and the Pi Cycle indicators.

Ethereum Holds Strong Above Key Support Levels

According to the Fidelity report, Ethereum has managed to stay above key support levels, with the realized price serving as a strong support since January 10th. This indicates a certain level of stability in the Ethereum market. Additionally, the NUPL ratio suggests that Ethereum is in a neutral zone, while the MVRV Z-Score indicates that the cryptocurrency’s market value is slightly above the “fair” zone. These indicators potentially set the stage for a bull run or at least sideways price action, as analyzed by Fidelity.

ETH’s NUPL indicator in the neutral zone. Source: Fidelity

Another noteworthy metric highlighted in the report is the percent of unique addresses in profit, which currently stands at nearly 66%. While this metric has not reached the green zone since January 2020, it implies that Ethereum owners may be actively using the cryptocurrency for diverse purposes such as trading, DeFi, staking, or purchasing other digital assets.

Furthermore, the report brings attention to the Pi Cycle indicators, which historically have proven to be reliable cycle top indicators. According to these indicators, Ethereum is currently in a neutral zone. The long-term moving average, following the sinking price, indicates that the market may experience more volatility in the near future. However, the direction of this volatility, whether it will be a bullish or bearish trend, remains uncertain and could depend on various macro factors.

ETH Adoption On The Rise

The Fidelity report also highlights the increase in monthly new Ethereum addresses by 9% in Q2 2023, despite a 1% decline in monthly active addresses and transaction count. New addresses represent unique addresses that appear for the first time in a transaction. Although this metric does not directly reflect network usage, it provides a clearer picture of Ethereum’s adoption rate.

ETH’s new address momentum rising. Source: Fidelity

The short-term moving average of new addresses is on the rise, surpassing the longer-term moving average, indicating an increasing rate of new users joining the network. This growth can be attributed to the efforts of new and existing projects incentivizing users and contributing to the expansion of the Ethereum ecosystem.

Another significant metric highlighted in the report is the net issuance of new supply issued by the Ethereum network minus the burned supply from transactions since The Merge. This net issuance has been in decline for over five months, with a net issuance lower than -700,000 Ether. This is significant because, as Ethereum’s supply decreases, it raises the relative ownership level of all remaining token holders.

The Current Price Levels and Key Support Levels

As of writing this article, ETH’s price stands at $1,849, experiencing a 2% decrease within the last 24 hours. Similarly to Bitcoin, Ethereum has lost its 50-day MA, currently positioned at $1,869. However, there are several key support levels that may help prevent a further bearish trend if the market continues to decline.

The closest support level is at $1,840, followed by another support level of $1,792. However, the most crucial support floor lies at the 200-day MA, located at $1,780. The ability to hold this support level will be a determining factor in the upcoming months, shaping the overall market sentiment for Ethereum.

It is important to note that the cryptocurrency market is highly influenced by various external factors, including regulatory developments, global market trends, and technological advancements. Therefore, while the aforementioned indicators and metrics provide valuable insights, market dynamics can evolve rapidly based on these external factors.

Featured image from Unsplash, chart from TradingView.com

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