ETH - After the bloodbath...

Assets covered: Ethereum (ETH)

Metrics used: Price, MVRV 90D, Supply on Exchanges, Social trends



ETH price action - Sanbase

What a bloodbath it has been for the month of May and we are not even halfway through it.

With macro uncertainties around inflation, rate hikes, UST blowing up, stablecoin regulations, this week saw the highest trading volume for ETH (even more than the previous melt down in Jan 2022) and looks like that's some decent capitulation volume.

SPX, BTC, ETH correlation- Sanbase

As usual, with the macro factors in play, if there's no chill on SPX, there's very little probability that crypto (risker asset class) would pick up any bullish steam. That said... as soon as the SPX bounce, it is likely we see a greater bounce from crypto.

Also, given how brutal it has been, with 6 - 7 weeks of red, we are really overdue for a relief.

Take for example, the amount of shorts in the past 8hour period, folks were heavily shorting ETH at the bottom.

ETH funding rate - coinglass

this usually don't end well for late shorters and a squeeze is likely to push prices up.

Supply on exchanges

ETH supply on exchanges - Sanbase

While we saw a nice drop in supply on exchanges for the past year or so, May 1st 2022 saw a huge increase in supply on exchanges as folks rushed to exit their positions, which is clearly reflected on the price itself.

Question now is....what's next? Further increase is well, likely to fuel further drops but also signaling that people are giving up altogether. On a sentiment note, this is good.


ETH MVRV90D - Sanbase

ETH's MVRV 90D which measures the mid-term profit/loss of holders is showing that we are almost into the opportunity zone, which historically saw a local bottom being developed with a decent R/R.

Social trend

"dead" mentions - Sanbase

To get an idea of how bad things are.... you just need to search the term "dead" and see the amount of mentions clustered over this period. Sentiment out there is pretty bad at the moment, bringing us one step closer to forming a bottom.


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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