ETH - How are we looking now?

Assets covered: Ethereum (ETH)

Metrics used: Price, MVRV 7D, Supply on Exchanges, Average gas fee, Social trends



ETH price action - Sanbase

ETH slides by -11% after making a fake breakout from $3,300s to $3,500s as the crypto market continues to be highly correlated to the S&P.

Since the start of the year, we have been tracking closely to the broader market and no surprise. If investors are going risk-off on equities given the macro situation (FED, inflation, recession, war) , more so they are going to offload from even riskier assets like crypto.

There's no exception....for now at least.


ETHMVRV 7D - Sanbase

ETH's MVRV 7D which measures the short-term profit/loss of holders is showing that we are almost into the opportunity zone, which historically saw a local bottom being developed.

Supply on Exchanges

ETH supply on exchanges - Sanbase

ETH's supply on exchanges continues to fall since mid-March, regardless of the rally. This may indicate that certain market participants with sizable amounts of ETH are not looking to sell anytime soon.

Social volume

Social volume - Sanbase

ETH social volume remains rather flat amidst the recent price rally, suggesting that the general market isn't excited at all and perhaps in disbelief.

That said, ETH social volume has overall been on a downtrend since the start of the year as Ethereum continues to lose its appeal to other L1s or L2s.

Zooming out, we'll notice that there was another similar ETH Price and Social volume divergence in the past year.

ETH price vs Social volume - Sanbase

Could we be seeing the same behavior?

Average Gas fees

ETH average gas fees - Sanbase

Previous major tops have seen average gas fees sky rocket as the crowd piled in, which actually makes this metric a decent proxy to spot whether we are close to the top.

Fast forward to today, we are no where near the sort of spike we saw back in May 2021 and Nov 2021. Where has the crowd gone?

Social trends

Mentions of CPI - Sanbase

Some interesting observations from previous tops in the past 3 months. During those tops, we saw huge spikes in mentions of "CPI" as the market preempts for perhaps hawkish decisions during the next FOMC meeting.

However, we are not seeing any strong mentions of "CPI" yet even though the data is coming next week on 14th April.

That said, "FOMC" is on everyone's mind now, since the FOMC minutes for March was released yesterday - spooking markets yet again.

FOMC mentions - Sanbase

This comes way ahead of the next FOMC meeting on 3rd May. The FED minutes once again reminded the market the hawkish stance the FED is taking.

It might be tiresome, but so far, markets have been playing a back and fourth game with the FED since the start of the year.

Anytime CPI data/FED hints at something: "Oh crap, markets going to crash!!!" , Price dumps.

Actual FOMC meeting: "oh look, it's not as bad as we perceived." , Nothing to see here, resume UP only.


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.

Thanks for reading!

If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!


Conversations (0)

No comments yet
Be the first to comment