Ether. Are we seeing signs of capitulation
Assets covered: Ethereum (ETH)
Metrics used: Social sentiment, exchange inflow, age consumed, Maker DAO collateral liquidation amount, average fees
It's just another bloody Tuesday.
BTC dumping 10%, ETH dumping 12%.
What are we seeing on data now?
Are we seeing signs of capitulation?
Are we seeing people start to panic once again?
- Where should we be looking for?
- 1. Social sentiment. Strong bearish sentiment is usually seen around capitulation period.
- 2. Exchange related activity. Namely exchange inflow. Spikes in exchange inflow might indicate people losing patience and depositing Ether to exchanges.
- 3. Holders behaviour. Namely age consumed. Spikes in age consumed indicate long term holders moving their bags.
- 4. Liquidations. It's no doubt painful.
- 5. Fees. They tend to top around bottoms as well.
What does the data show us?
Weighted social sentiment is very low. It's very bearish. Looking at the chart we might say that price at least usually stops tanking from these bearish levels:
Oh, yes, we do see a nice exchange inflow spike during this dip. Quite a capitulation sign as well:
The history says It's not uncommon for large inflows of tokens to the exchange to precede rapid price growth. Proof from Santiment Academy.
This metric tracks the movement of previously idle Ethers. And one potential use case for this metric is identifying when big market players exit the project (Academy). What do we see? A string of age consumed spikes last day:
Capitulation? May be.
Yes, quite some. Not that much overall but still, 13K WETH has been liquidated on Maker DAO.
We used to see a big spikes in fees on dips. Every now and again we did see a sort of capitulation spikes in fees. Can we see it now? No:
So, despite a capitulation visible on liquidations and other metrics, Ethereum fees just don't care. No capitulation signs here.
Overall, four from five metrics do likely indicate possible capitulation in ETH holders.
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.