Special Metric Used for Ethereum: What to Expect in the Coming Days? Bearish or Bullish Sentiment?

Cryptocurrency analysis firm Alphractal noted a decrease in risk appetite for major digital assets such as Bitcoin (BTC) and Ethereum (ETH), indicating a shift in market sentiment.

The company warns in its latest report, especially about Ethereum showing signs of high volatility.

Alphractal’s proprietary Normalized Risk Metric (NRM) for Ethereum is currently standing at 0.38, a level historically associated with increasing market turbulence. The company points to past examples in 2019 and 2020 where similar NRM levels preceded strong price fluctuations, including both upward oscillations and deep corrections.

As an example, the NRM scale works as follows:

• Close to 1: High risk and overbought conditions.
• Near 0: Potential buying opportunities.

Considering the current situation, according to the analysis company, Ethereum can create both opportunities and risks for both traders and long-term investors by entering a period of aggressive price fluctuations.

Alphractal also assessed broader market sentiment using the Alpha Crypto Sentiment Gauge, which gathers multiple sensitivity indicators, including Twitter debates and news coverage. According to the firm, the metric is currently positioned in Bear territory, indicating increasing caution among investors.

According to the analysis company, if historical patterns repeat, Ethereum’s current NRM reading may herald a period of intense volatility.