Crypto analytics firm Santiment is issuing an alert to traders, warning Ethereum (ETH) may be facing an increase in bearish momentum.
In a new report, Santiment says Ethereum is tightly following the price action of the S&P 500 amid a bleak macro environment.
“ETH continues to follow very closely with the S&P as global uncertain remains.
If indeed S&P leads the way, then it’s important that the retest levels see a bounce for bullish continuation else it’s highly unlikely that ETH will hold its ground.”
According to Santiment’s chart, the S&P needs to stay above 4,100 points for ETH to have a shot at bullish continuation. The S&P 500 closed the trading week at 4,057 points following a 3.37% decline on Friday.
The firm is also keeping a close watch on Ethereum’s network growth, and says the on-chain metric is flashing a red flag.
“ETH’s network growth have been declining steadily since the start of August while price continued to climb. This divergence is generally not a healthy one as it indicates that there’s very little new market participants coming in to support the price.
Everyone that wanted a position is likely already in.”
Ethereum is currently valued at $1,503, down over 10% in the last 24 hours.
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