Ethereum looks to be back and its worth noting when to take profits which can be predicted using the Net Unrealized Profit/Loss (NUPL). That alongside various realized price metrics can be used for insightful clues.
As price of ETH moved, the NUPL value shifted across a color spectrum from deep red to blue. This indicated phases of loss to potential greed control zones.
As at press time, ETH NUPL was above the neutral line, demonstrating substantial profit but not yet to a peak.
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Previously, the shift from darker green to blue indicated moments where market sentiment might be overly bullish, suggesting it was an ideal time for investors to consider taking profits or at least hedge against a potential correction.
ETH NUPL + Realized Price chart | Source: CryptoQuant
The realized price indicated the market price was above the average price at which coins were last moved. Historically, markets peaked above the realized prices, especially during the dark green to blue NUPL phases. It signified high profit realization zones meaning it is not yet time to take profits on ETH. There was still room for growth.
To maximize gains and avoid overexposure during extreme bullish conditions, investors need to reduce positions or take profits. Usually profit taking when NUPL neared or entered the blue zone, aligning with peaks in the market price above the realized prices works well. The indicator can be used to anticipate market tops to lock in gains before any major retracements.
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Ethereum Price Momentum in a Week
ETH ascended to close the gap to $3,200 within a week with momentum. After breaking through a consolidation range that it tested several times, Ethereum surged past the $3,150 resistance level. This move was marked by increased trading volume, indicating strong buying pressure.
The recent large green candles, showed that Ethereum overcame significant resistance and took liquidity above the previous highs around $2,768. The current price near the $3,200 mark is expected to encounter resistance given its historical significance as a psychological and technical barrier.
ETH/USD 3-day chart | Source: Trading View
Given the strong close above key resistance levels, if Ethereum maintains its momentum and holds above these levels, it could continue to ascend, possibly to new highs in the near future. The price action suggested that Ethereum’s ecosystem is positioned to outperform in the coming period supporting NUPL’s prediction.
The Golden Cross on The Weekly MACD
Ethereum flashed two long-term bullish signals as price broke trend line while MACD had the Golden Cross as Trader Tardigrade noted. ETH broke through a descending trendline that had been capping the price for several months. This breakout confirmed a shift in market sentiment from bearish to bullish.
https://twitter.com/TATrader_Alan/status/1855538398813102438
The signals suggested that Ethereum was positioned for an extended upward movement. Historical performance under similar conditions suggest that Ethereum could continue to rally, potentially reaching new highs.
Future market movements will depend heavily on broader market conditions and investor sentiment, but the indicators present at the time pointed towards more gains for ETH perfectly aligning with the NUPL.