The Ethereum Name Service (ENS) has been a notable player in the cryptocurrency market, with occasional endorsements from Vitalik Buterin causing temporary spikes in its value. Recently, the project has struggled to maintain its price above the $26 mark, even dipping below this level. Over the past ten days, ENS has experienced significant price appreciation, with over 90% of its supply now in profit, signaling a market peak.
What Drives ENS Market Peaks?
Typically, market peaks are observed when more than 95% of the total supply is in profit. For ENS, this peak threshold appears to be lower, at 90%. Historical data indicates that price corrections usually follow once this profit threshold is breached. Currently, ENS is at 92% profitability, suggesting a potential correction may be imminent.
The Global In/Out of the Money (GIOM) indicator reveals that approximately 5.56 million ENS tokens, worth $144 million, could turn into loss positions if the market corrects. This hints at a decrease in the likelihood of holding profits in the near future.
How Will ENS Price Fluctuate?
ENS is currently trading at $25.7, marking its third drop below the $26 support level this year. If it fails to reclaim this benchmark, the price could fall to $23, and if that support fails, further down to $20.9. Investor reactions and profit-taking behaviors could exacerbate this decline, potentially pushing the price down to $19.2.
Nevertheless, there is potential for a rebound from any of the existing support levels. A successful recovery above $26 could negate the bearish sentiment and pave the way for a new bullish trend.
Strategic Insights for Investors
Key Takeaways:
– Monitor the $26 support level closely, as it is pivotal for price direction.
– Be aware of the 90% profit threshold; surpassing it could signal a correction.
– GIOM indicators suggest significant risk of tokens moving into loss positions.