Ethereum (ETH) could be heading for a price correction as a key on-chain metric signals increasing profit-taking among short-term holders. The Market Value to Realized Value (MVRV) ratio—a tool used to identify market tops and bottoms—has now reached a level that often precedes a pullback in price.

According to recent data, Ethereum’s 60-day MVRV ratio has surged to over 8%, indicating that traders who bought ETH within the past two months are sitting on substantial unrealized gains. This sharp rise in profitability raises the risk that these investors may begin selling to secure profits, applying downward pressure on the ETH price.

Short-Term vs Mid-Term Holders: The Growing Gap

The MVRV indicator is currently showing a significant divergence between short-term and mid-term holders. The 60-day MVRV has climbed to 8.26%, while the 180-day MVRV remains low at just 0.65%. This widening gap means that short-term investors are outperforming mid-term holders by a large margin.

Such a spread typically triggers profit-taking, especially when short-term gains outweigh long-term performance. This trend began in late April, around the same time that Ethereum’s price saw a notable rally driven by increased ETF inflows.

However, as ETH approaches critical support levels, the growing difference in holder profitability could lead to a short-term correction.

Sell Signal Strengthens as Realized Profits Increase

Adding to the bearish signals is the rise in the Network Realized Profit/Loss (NPL) metric, which measures the actual gains or losses investors have realized by moving their ETH. Recent spikes in the NPL indicator suggest that some holders have already started selling to lock in gains.

This behavior aligns with the current sentiment shown by the MVRV ratio. When both indicators flash red simultaneously, the risk of a near-term price drop increases significantly.

Ethereum at Risk of Breaking Below $2,410 Support

As of now, Ethereum is trading around $2,739, just 13% above a key support level at $2,410. This level has acted as a crucial floor during previous corrections, and a breach could signal a deeper downtrend possibly extending toward the $2,000 region.

Analysts warn that unless a strong bullish catalyst appears soon, the growing wave of profit-taking could push ETH below this vital support. The current weakening in momentum indicators, such as the Awesome Oscillator (AO), adds to these concerns. AO histogram bars are shrinking, signaling a possible decline in bullish strength.

Technicals Suggest Price Reversal May Be Near

Chart analysts have also noted the formation of a bearish engulfing candle on the daily ETH chart, a classic pattern that often predicts price reversals. The Relative Strength Index (RSI) has dipped to 49, moving below the 50 neutral line, indicating fading buying momentum.

Moreover, the Moving Average Convergence Divergence (MACD) indicator recently saw a bearish crossover, further confirming that the current price strength may be running out of steam.

If Ethereum fails to hold the $2,410 level, it may fall into a previously established consolidation range that has support closer to $2,000.

Is There Still Hope for Ethereum Bulls?

Despite the bearish outlook from the MVRV and other indicators, some analysts believe Ethereum could still stage a rally. According to CoinGape, there are several bullish patterns forming on ETH’s charts that suggest a move toward $4,000 could be possible in the medium term.

These patterns would need to be confirmed by a return of strong buying interest, likely driven by positive news such as regulatory clarity, renewed ETF momentum, or increased institutional adoption.

Conclusion

Ethereum is currently at a critical juncture. With short-term holder profitability soaring and key on-chain indicators flashing sell signals, the risk of a near-term correction has increased. The $2,410 support level will be crucial to watch. A break below this level may open the door to a steeper decline, possibly toward $2,000.

However, if bullish catalysts re-enter the market and long-term investors hold their ground, Ethereum may still avoid a major drop. For now, traders and investors alike should keep a close eye on these metrics and price levels to anticipate what’s next for ETH.