ETH - How's it looking now?

Assets covered: Ethereum (ETH)

Metrics used: Price, MVRV 7D, Supply on Exchanges, MakerDAO debt stats



ETH price action - Sanbase

Following the Jan 2022 lows, Feb has put in a higher low so far. Bulls better hope that resistance around $3100 - $3200s break to establish a higher high for further continuation.

Falling back to low $2,000s wouldn't be pretty.

Supply on Exchanges

ETH Supply on Exchanges - Sanbase

The start of the year saw strong decrease in ETH's Supply on Exchanges even as price continued to dip.

Could this be people feeling confident at first about "buying the dip" , only to discover several other dips along the way?

This behavior changed as we entered Feb amd daily news of possible war between Russia and Ukraine intensified. Folks were just sending ETH to exchanges to exit as much as possible, which reflected on the price action.

This eventually saw a sharp spike on the day of invasion (24th Feb) and marked the local bottom for now.

If people thinking that they were buying the dip, well, the dip just kept dipping.


ETH's MVRV 7D which measures the short-term profit/loss of holders is showing that we have entered the danger zone and reach the peak in the past 3 months, which historically saw short-term holders who are well in profit....take some off the table.

A drop in price and MVRV in coming days would help make for a good reset and opportunity.

MakerDAO Debt

Let's also take a look at the MakerDAO debt stats as a proxy to market participant sentiment.

MakerDAO total Debt - Sanbase

Back in OCT 2021, market participants saw that price probably bottomed and begun taking on debt and with rising prices, they grew even more confident, creating more debt and pushing prices even further.

Until debt creation plateaued. No new money is coming in to prop up the price...and down we went.

ETH's been on a downtrend since then and saw a massive debt reduction around Jan 2022 lows. Debt reduction continues till today, indicating that market participants are afraid and unwinding further.

When we break down the debt into collateral used, we can see that market participants formed clusters of debt creation spikes from OCT 2021 till early Nov 2021.

MakerDAO Debt created - Sanbase

In fact, the highest debt cluster spike was seen at the top on Nov 9th 2021 and since then, no higher debt cluster was seen. The big boys and retail are not taking any further debt at all.

That said, we are observing some new clusters forming, tiny but still too early confirm a new participant bullish outlook is starting up.

What about the debt repaid?

MakerDAO debt repaid - Sanbase

Back in Nov 2021, some smart money saw a possible double top and reduced their risks, well done. Fast forward forward to Jan 2022 lows (almost -50% later from the top), a new cluster formed as folks capitulated to avoid liquidation.

Come Feb 2022, with the Russian/Ukraine war uncertainty, we saw yet another cluster saying "Nope, i'm not going to be part of this."

The sentiment is pretty bearish, with a lack of confidence at the moment that the price will go up any further.

Thanks for reading!

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