It is no longer news that Ether [ETH] had an impressive run in January. Within that 31-day period, the leading altcoin's price rallied by over 30%. The price jump also caused it to trade at levels last seen prior to FTX's unexpected implosion.
However, as profit-taking intensifies, the alt might be gearing up to shed some (if not all) of its gains in February. A look at ETH's Aroon Indicator on the daily chart revealed that bullish sentiment has weakened significantly in the past few weeks. The Aroon Up line was spotted at 21.43%.
Usually, when the Aroon Up line approaches zero, it suggests a weak uptrend and a distant recent high, indicating the possibility of a trend reversal.
Also, currently, there is a dearth of new demand to help drive up the alt's price.
Following an unimpressive end to the 2022 trading year, the proposed launch of the much-awaited layer-2 blockchain Shibarium and the uptrend in the general market have culminated in a growth in SHIB's value since 1 January.
Currently trading at $0.000012, SHIB's price has increased by 42%. For the most part, market sentiment has been mostly positive, indicating that the market is convinced of a continued rally in the alt's price as long as macro-factors remain favorable.
However, the recent rally has failed to result in gains for many holders due to the ongoing effects of the turbulent trading period in 2022. This is indicated by SHIB's MVRV remaining in the undervalued range.
Lido Finance kicked off the 2023 trading year by displacing MakerDAO as the decentralized finance (DeFi) protocol with the highest total value locked (TVL). Still maintaining its spot, its TVL currently sits at $8.22 billion, per data from DefiLlama.
The reason for the rally in TVL is not far-fetched. With the Shanghai upgrade scheduled to take place before the close of Q1, 2023, the liquid-staking platform has witnessed a surge in the number of staked deposits on its platform.
Further, the growth in user activity on Lido Finance has contributed to a rally in the value of its native token LDO. On a year-to-date basis, LDO's price has gone up by 163%.
Interestingly, while the LDO addresses that hold between 100 and 1,000,000 LDO tokens have spent the last month accumulating the altcoin, holders of 1,000,000 to 100,000,000 LDO tokens gradually let go of their holdings.
The crowd is aware of the current market trend of artificially inflating prices, known as a "pump." This means that it is likely that the market will experience a downturn in the next few days. The risk vs reward of buying now does not make it a worthwhile investment.
When the crowd is aware of such pumps, it is often the case that large holders, known as "whales," are selling their holdings. This is the case for Bitcoin, Ethereum, and Litecoin.
It is advised to be cautious and wait for better opportunities in the market rather than jumping into a potentially unstable investment. Stay safe.