Anyone that's used (or tried to use) Ethereum in the past 30-60 days is painfully aware of the mounting fee problem tackling the network.
At the time of writing, the average fee to interact with the Ethereum blockchain stands at $12.2, though it regularly climbs to 3-4x that number on occasion.
What is less talked about, however, is that many recent fee spikes only really last about 30-60 minutes, and often seem to coincide with ETH's local price bottoms and short-term bouncebacks:
While the pattern is far from conclusive, it may suggest that at least some fee hikes may be prompted by panic sell-offs and 'paper hand' capitulation, which - assuming enough 'buy the dip' pressure - ends up marking an interim bottom for the second largest coin.
Though the ratio of a crypto asset's supply on exchanges may not seem to have an immediate impact on prices, the long-term correlations between coins moving away from exchanges while prices move up, is quite evident.
Let's take a look at three ERC-20 assets that are showing this pattern as a volatile week in crypto full of price retracements is coming to an end:
Crypto's #2 market cap asset has seen quite the pullback since its retrace from above $2k last week. However, ETH's supply isn't budging away from offline wallets.
Bancor's supply moving away from exchanges had a lot to do with its ability to hit a 2-year high $6.17 last week. BNT supply is now 71.7% below its one-year average.
KNC's supply has jumped to 39.2% after being as low as 36.1% on January 31st. On the long-term scale, the amount of tokens is still 17% lower than its one-year average.
Santiment's NVT Token Circulation model continues to be an effective way to keep tabs on how healthy the circulation rate of tokens are for various crypto assets. As market caps rise, it takes more and more unique tokens moving from address to address to justify future price rises. Check out our write-up on how it works!
Here is a look at where each chart currently stands, with green bars indicating the most bullish signals, and red signaling the most bearish:
Bitcoin's NVT chart continues indicating a 'semi-bullish signal for a 5th straight month, with the past two days particularly being very bullish following its new all-time high.
Ethereum has outpaced Bitcoin percentage-wise thus far in 2021, and for good reason. February is the 10th straight month of a green bullish signal.
Chainlink's all-time high was eclipsed yesterday, and its token circulation level is showing as bullish for the 13th straight month.