The post Why Ethereum is seeing waning bullish sentiment appeared on BitcoinEthereumNews.com.

Journalist Posted: December 26, 2023 Ethereum saw a drop in the Estimated Leverage Ratio. In combination with other metrics, the inference was that bullish certainty was falling. In a report last week, AMBCrypto highlighted that Ethereum [ETH] has underperformed Bitcoin [BTC] in recent weeks. Comparing their performance in December, AMBCrypto found that ETH has gained 11.3% at press time, while BTC has gained 14.8%. This meant that market participants had a valid reason to question their short-term ETH holdings. Evidence for this was present in the form of a dropping Estimated Leverage Ratio (ELR), AMBCrypto found. This metric warranted a closer look and could reveal what the market expects for Ethereum over the next month. The ELR has trended lower for a while now As the name suggests, the ELR is an estimation that divides the exchange’s Open Interest with the exchange’s coin reserve to approximate the average leverage employed by users. This metric generally trends higher during bullish market conditions, when market participants are encouraged to assume more risk in search of gains during a trending market. The ELR chart from CryptoQuant showed that the metric has trended higher since the first week of September. Around that time, ETH dipped to $1531 but bounced higher and began to rally. On the 8th of December, the 14-day Simple Moving Average (SMA) of the ELR began to drop. At press time, this dip was still in progress. This meant that users were less willing to assume risk. They might also be pivoting to long-term holding strategies. Source: CryptoQuant To better understand what is happening, AMBCrypto looked at other metrics. One of them was the Ethereum Exchange Inflow. A rising ELR alongside a rise in the inflows would be a strong signal that participants were bearish on ETH. Source: CryptoQuant On the…

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Filed under: News - @ December 26, 2023 2:58 am