ETH - How are things looking now

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Sanfam
Jan 12, 2022

Assets covered: Ethereum (ETH)

Metrics used: Price, MVRV 7D, Supply on Exchanges, Daily Active Addresses, Network Growth, Social Volume, Weighted Sentiment

Charts: https://app.santiment.net/s/Cn1tto2o


Majority of the market's been on a downtrend since early December 2021, let's take a quick look at how things are going for ETH since then.


ETH price action - Sanbase

Things been looking pretty bad so far as we kick of the new year, continuing the downtrend since early December 2021 well into Jan 2022.


We just had a 2nd major dump and ETH bulls will have to hold the fort at $2800 (if we do get there), else it's further goblin town.


But for now, will we see a similar price behavior play out as observed in September 2021's dump reaction?


Much of the downtrend can be attributed to macro concerns surrounding CPI, inflation and the FED's decisions.

CPI and inflation mentions - Sanbase

Yet again, we are seeing brewing concerns around the same topics as seen in November/December 2021. This is an important week as the markets await to see results and decisions around CPI and inflation.


Whatever the results will be, volatility is expected. So buckle up and enjoy the ride. Crypto folks will be CPI and inflation experts when this is over.


Ideally, once we get this "uncertainty" out of the way, we can finally find some form of relieve as markets pretty much overreacted heavily over the past few weeks.




ETH supply on exchanges

ETH supply on exchanges - Sanbase

ETH's supply on exchanges continue to decrease even as price falls, suggesting that certain market participants might be still accumulating regardless.



MVRV 7D

ETH MVRV 7D - Sanbase

ETH's MVRV 7D which measures the short-term profit/loss of holders is showing that we are still safe from the the danger zone, as all short-term holders are just slightly in the profit at the moment, which may leave us some room to go before risk is increased significantly.



Network Growth

ETH Network Growth - Sanbase

Ever since late OCT 2021, ETH's Networth Growth has been on a downtrend, which is pretty in line with the price action as well. No surprises here as market participants continue to lose interest in ETH and venture to other L1s.


Previously, we have seen them flock to SOL and AVAX. This time round, we are seeing NEAR, ONE, ATOM and FTM.

Other L1 price action vs ETH - Sanbase

Will we see ETH go back to its glory days? Perhaps only when we are closer to the merge in Q2 but until then, it's likely to cruise and see more participants flocking to other L1s/L2 solutions.



Daily Active Addresses (DAA)

ETH DAA- Sanbase

While there's little new participants coming in, ETH's Daily Active Addresses remain healthy looking, network is still very much active regardless of the price action we are seeing. Good sign so far.



Social volume

ETH social volume - Sanbase

ETH mentions were lackluster when price was heading upwards after bouncing off in late September 2021, was that a sign of disbelief?


Meanwhile, we are seeing more mentions as ETH price goes on a downtrend. Did the crowd switch to believing a new ATH for ETH is possible and to "buy the dip" all the way down to where we are?


Weighted Sentiment

ETH weighted sentiment - Sanbase

Weighted sentiment is now at its lowest in 6 months, suggesting that market participants are very bearish about ETH and have been so since late December 2021.


So far so good, if we are to have a bottom forming, this is what we want to see.



ETH
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Sanfam
Jan 12, 2022

Thanks for reading!

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