Ethereum has been on a downward trend since hitting a new all-time high in August. However, this decline in price was hastened by the robust market crash on October 10. After the prolonged period of bearish performance and steady pullback, the altcoin is finally experiencing a complete reset of its liquidity.
A Clean Slate For Price Action After Ethereum’s Liquidity Reset?
As the ongoing market-wide volatility overshadows Ethereum, the leading altcoin and network has now reached a critical junction. Altcoin Vector, an institutional-grade reporter and signal provider on the social media platform X, points to a key shift in the market dynamics of ETH.
The market structure of Ethereum is drastically changing as liquidity across exchanges, DeFi platforms, and key on-chain channels undergo a reset. According to Altcoin Vector, ETH’s liquidity has developed a full reset, a crucial pattern that historically occurs prior to every major bottom in the altcoin’s price.
This complete structural liquidity reset is more than a brief halt. It is a sign of deep recalibration of ETH’s movement, trading, and flow within its quickly growing ecosystem. As a result, Ethereum is currently at a critical juncture where decreased liquidity could either lay the groundwork for a strong comeback or expose the asset to more severe price fluctuations in the future.
Altcoin Vector highlighted that a liquidity collapse is typically followed by multi-week bottoming rather than a structural breakdown. However, as long as liquidity recovers, the correction/bottoming window remains open. In the meantime, the leading altcoin is presently back in that market phase.
With being in a bottoming phase, Altcoin Vector declares that it is only a matter of time before the next expansion leg kicks off, particularly if liquidity is rebuilt in the upcoming weeks. However, this impending trend still carries its own risk.
Should the liquidity take a lengthy period of time to return, the slow grind can remain active for a long time. Such a pattern would likely leave the structure of ETH increasingly vulnerable to price swings.
When To Buy ETH
When the market turns bearish, determining the ideal time to acquire a coin becomes increasingly difficult. As Ethereum’s price struggles with a downward trend, Leo Lanza, a builder and crypto investor, has outlined a good time to purchase ETH in order to minimize losses.
In the X post, Lanza stated that when ETH trades 1:1 with ecosystem Total Value Locked (TVL), it is the best moment to purchase the altcoin, as often seen in the past. According to the investor, this is the precise point at which the market loses sight of the true value that Ethereum is securing, allowing for a strategic acquisition and positioning ahead of major price spikes.
Lanza calls ETH an inelastic-supply commodity. Its supply cannot grow to keep up with institutional demand as more value is secured throughout the Ethereum ecosystem. Wall Street is currently building on the network, and trillions of assets are being tokenized on the chain. This high demand will trigger relentless upward pressure on ETH as the security collateral of global finance.
Featured image from Peakpx, chart from Tradingview.com
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