Ether. Are we seeing signs of capitulation

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Santrends
Jun 8, 2021

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?


Let's see.


  1. Where should we be looking for?


  1. 1. Social sentiment. Strong bearish sentiment is usually seen around capitulation period.
  2. 2. Exchange related activity. Namely exchange inflow. Spikes in exchange inflow might indicate people losing patience and depositing Ether to exchanges.
  3. 3. Holders behaviour. Namely age consumed. Spikes in age consumed indicate long term holders moving their bags.
  4. 4. Liquidations. It's no doubt painful.
  5. 5. Fees. They tend to top around bottoms as well.


What does the data show us?



Social sentiment

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:

Source: Sangraphs

Capitulation on sentiment? May be. This crowd doubt is extremely indicative of a capitulation event if it lasts for too much longer, as Brian points in his latest insight



Exchange Inflow

Oh, yes, we do see a nice exchange inflow spike during this dip. Quite a capitulation sign as well:

Source: Sanbase

The history says It's not uncommon for large inflows of tokens to the exchange to precede rapid price growth. Proof from Santiment Academy.



Age Consumed

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:

Source: Sanbase

Capitulation? May be.



Liquidations

Yes, quite some. Not that much overall but still, 13K WETH has been liquidated on Maker DAO.

Source: Sanbase

Capitulation? Likely.



Fees

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:

Source: Sanbase

So, despite a capitulation visible on liquidations and other metrics, Ethereum fees just don't care. No capitulation signs here.



Summing up

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.


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Santrends
Jun 8, 2021

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