Santiment, the crypto data analytics provider, highlighted a significant decline in Ethereum supply on exchanges in its latest update. This notable trend reflects an increased level of investor confidence in the cryptocurrency. Ethereum’s market value currently stands at approximately $1,800. This development has sparked curiosity among crypto enthusiasts and analysts, potentially signaling a shift in the market landscape.
Santiment’s latest insight report delves into the intriguing dynamics of Ethereum, suggesting that excitement is building within the crypto community. One of the key observations made is the divergence between ETH’s price and trading volume. While the price of Ethereum has been on an upward trajectory, trading volume has seen a significant decrease. This phenomenon indicates a potential weakening of momentum within the market.
Another noteworthy point is the decline in ETH’s supply on exchanges as its price continues to surge. This drop in supply strongly suggests that investors are increasingly confident in the cryptocurrency and are opting to hold their assets rather than trade them on the open market.
Its social dominance is also rising, although it remains lower than its previous peak. It suggests that there might still be room for growth before the market cools down. However, Santiment’s report raises a cautionary flag by noting that Ethereum’s MVRV 30D (a metric measuring short-term profit/loss of holders) has entered the “Danger Zone.” Historically, this has preceded a price peak, signaling a potential turning point for the cryptocurrency.
One positive sign for Ethereum is the influx of new capital, primarily in the form of USDT (Tether). This injection of fresh liquidity is viewed as a healthy indicator, as it often leads to increased speculative activity in the market.
Ethereum’s Layer-2 Platforms Thrive
Simultaneously, on October 27th, the total value of cryptocurrencies locked in Layer-2 platforms on the Ethereum network reached an all-time high. At its peak, this figure touched $12 billion before stabilizing at around $11.87 billion.
This surge in value has taken place despite a relatively lackluster performance in the wider cryptocurrency market. Regarding Ether-denominated value, the ecosystem registered a historic high on October 11th, 2023, with 6.72 million Ether locked, a substantial increase from the 3.5 million Ether locked a year ago.
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