Ethereum Name Service (ENS) Price Soars by 40%, Correction Looms
ENS Price Increases by 40% in 7 Days: Is a Correction Coming?
In the last seven days, the price of ENS (Ethereum Name Service) has increased by over 40%. But could this rise soon come to an end? According to data from CoinMarketCap, the value of the altcoin has increased by 40.27% in the past week, positioning itself as the crypto asset with the highest gains in this period.
Demand for ENS is Increasing
The price increase of ENS is not only due to the general rally in the altcoin market, but also to a real demand for the token. On-chain data from Santiment shows that the daily number of active ENS addresses has increased by 47% in the last week. Similarly, the daily number of new addresses created for trading the altcoin has increased by 49% in the same period.
Indicators Confirm High Demand
The positions of key momentum indicators on a daily chart confirm the high demand for ENS. For example, the Relative Strength Index (RSI) was at 82.02, while the Money Flow Index (MFI) returned a value of 82.19. At these levels, the indicators show that the accumulation of ENS among daily traders significantly exceeds sales.
Possible Price Correction in Sight
Despite the positive indicators, there are also signs of a possible price correction. The token’s 30-day MVRV ratio was 59.32% at the time of writing this article. An MVRV ratio of 59% means that those who bought the coin in the last month have recorded an average value increase of 59%. With the waning of the ETF euphoria, traders could start realizing these gains, which could exert downward pressure on the ENS price.
Profit-Taking Activity Has Already Begun
An analysis of the ENS exchange activity shows that profit-taking activity has already begun. According to data from Santiment, there has been an increase in ENS supply on the exchanges since January 10th. It has since risen by 5%. This shows that holders have started selling their tokens. If the bullish sentiment subsides, profit-taking activity will pick up pace and push the value of ENS to new lows.
Sources: CoinMarketCap, Santiment
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