ETH - Where has all the magic gone?

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Sanfam
Sep 22, 2021

Assets covered: Ethereum (ETH)

Metrics used: Price, Supply on Exchanges, Network Growth, Daily Active Addresses (DAA), MVRV 7D, Network Growth, Dev Activity

Chart: https://app.santiment.net/s/da9inoox


As the market wide dip led by BTC continues, let's take a look at how ETH is doing.



ETH price action - Sanbase

ETH has lost its $3,000 level and even plunged right through $2,800s (which many have hoped that it bounced here) before bouncing off the $2,600s.


It's still trading under $3,000 and desperately needs to get back above it.


Not the healthiest look around if we want to continue an uptrend, but most of the price action recently been rather dependent on macro events (Evergrande meltdown, SEC's outlook on crypto, etc).


Uncertainty still looms so it's quite common to see some people derisk accordingly, and in many cases, markets tend to over react/extend beyond reality of what is going on.



Supply on Exchanges

ETH Supply on exchanges - Sanbase

During the recent dip, there was an influx of ETH to exchanges, likely indicating that some people have sold off during this dip.


Overall, ETH supply on exchanges remain on a downtrend which is a good thing as it alleviates sell pressure.



MVRV 7D

ETH MVRV 7D - Sanbase

ETH's MVRV 7D which measures the short-term profit/loss of holders is showing that we are in the undervalued zone, as all short-term holders are in the loss at the moment - which presents a decent opportunity for a bounce.



Network Growth

ETH Network Growth - Sanbase

ETH's Network Growth has been stagnant for the past few months even after the price bottomed out. Price continued to grow but Network Participants continue to just range, this deviation is generally not a healthy sign.


Much of this behavior is likely attributed to the growth in L1s (AVAX, FTM, ATOM) during this period and the gradual decline in NFT speculation.


As usual, if there are better speculative opportunities that are cheaper and yields higher ROI, people will be there. And for now, ETH isn't the place for that.




Daily Active Address (DAA)

ETH Daily Active Addresses - Sanbase

While ETH's Network Growth did not see a decent increase, ETH's Daily Active Addresses remains rather active over the past 6 months, indicating the health of the network is still strong.



Miners' Balance

ETH Miners' balance - Sanbase

ETH miners remain unfazed despite the recent downward price action, instead, they are still holding on to the mined ETH and have reached a 6 month high.



Summary

ETH continues to struggle as most speculators have moved on to other L1s for better ROI, eventually leaving it with a stagnant Network Growth.


However, other on-chain metrics are providing some hope as DAA remains rather active, strong hands are present, and supply on exchanges continue to be on a downtrend.


Short-term wise, MVRV 7D is suggesting a bounce, but the real rally is unlikely until we get closer to the next major speculative event - The transition to Proof-of-Stake (PoS) in 2022.


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.

ETH
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Sanfam
Sep 22, 2021

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