Ethereum Enters Buying Territory Below $3K Amid Liquidity Realignment
Key Highlights:
- Ether's 20% drop in November has reinforced a downward trend, revisiting the $3,000 threshold.
- The Mayer Multiple's dip below 1 suggests a prime accumulation period, mirroring historical lows.
- Despite a liquidity reset, significant clusters at $2,900 and $2,760 indicate potential volatility before recovery.
Ethereum's native token, Ether (ETH), experienced a sharp decline of nearly 20% in November, falling from $3,900 to $3,000 by Nov. 17. This marks a return to levels last seen in July, establishing a pronounced daily downtrend characterized by lower highs and lows. Despite this, long-term accumulation signals are emerging.
Mayer Multiple Below 1: Implications for ETH
The Mayer Multiple, provided by Capriole Investments, measures the ratio of ETH's current price to its 200-day moving average. A value below 1 indicates Ether is trading below its long-term trend, historically aligning with accumulation zones. The MM's drop below 1 marks a return to the 'buy zone,' a precursor to substantial recoveries in past cycles.
Historically, readings below 1 have indicated long-term bottoms, with the notable exception of January 2022 during a broader market downturn. Current MM levels suggest early-cycle reset conditions, closer to historical buying opportunities than sell-off zones.
Liquidity Adjustments and Market Outlook
While macro accumulation signals are present, short-term price actions remain at risk. Hyblock Capital data shows ETH, despite crossing the $3,000 mark, is above dense long-liquidation clusters, hinting at a potential need for a deeper liquidity flush.
"We've cleared several large long liquidation clusters. The next are at $2,904 to $2,916 and $2,760 to $2,772," Hyblock reports, suggesting a deeper market adjustment might be needed before stabilizing.
According to Altcoin Vector, Ether's liquidity structure has "fully reset," a condition seen before major bottoms. Liquidity collapses often precede multi-week bottoming phases rather than immediate structural breakdowns. As liquidity rebuilds, ETH could enter its next growth phase. However, prolonged liquidity restoration could lead to extended market vulnerability.
This article does not offer investment advice. Every investment and trading move involves risk, and readers should conduct their own research.