Shed a Teareum for Ethereum?

It seems like just yesterday (but not really) when people were clamoring to buy ETH when its market value was well above $4,000. Reaching an all-time high market cap of $489.17B on November 10, 2021, things were looking bright for the #2 cap crypto asset, along with many other projects out there.

But after a steep correction, and bloodbath that was 2022 (in particular), ETH's price is about one third of what it was 22 months ago. The project has seen its share of attention, with the biggest share about one year ago during the highly anticipated lead-up to the merge. And in terms of fulfilling its purpose, the improved scalability and energy consumption was a success. But the lack of any sort of breakout for the asset has gradually left traders paying less and less attention to the asset (in contrast to other large caps) in the year since.

So where are we now? Is there a light at the end of the tunnel for Ethereum? Santiment certainly still sees the project to be viable, regardless of where its current value sits. In fact, our native token, SAN, is an ETH-based ERC-20 that relies on the blockchain. But with all this said, what do the metrics say?

Well, as far as utility goes, Vitalik's project has slumped mightily, with on-chain transaction volume and trading volume seeing a signicicant drop since peaking in early November of last year.

Though not necessarily a red flag for any asset, this is indicative of the crowd simply showing disinterest during a time when many traders really can't decide whether the $1,650 price level is overvalued or undervalued. We have seen quite a bit of psychological support around the $1,500 level, if ETH drops that far. So expect for volume to pick up significantly if/when this scenario happens.

But besides looking at the general crowd's enthusiasm, it's important to take a look at how the key sharks and whales are behaving. And as we can see, there has been about a 4-month long dump in supply from addresses holding between 10 and 10,000 ETH.

They really were accumulating significantly at the end of last year, but profit taking from these key tiers happened hard and quickly right as the price was hitting around a 1-year high of ~$2,120.

This continued tailslide in supply held by sharks and whales is something we need to monitor. Prices can still rise as they take profit, and their holdings are far from a perfect correlation. But in terms of a signal for an immediate return to $2K and above, it certainly isn't being perpetuated by whales.

Lastly, for those who are extremely concerned about Ethereum's presence in the overall cryptocurrency ecosystem, you can rest assured knowing that development activity is still very alive and well by the ETH team.

Over the project's 8-year history, there is a very obvious increase in work to improve and innovate. Though it's a pretty narrative to actually accuse Ethereum of having a team of people who don't care/could rug pull investors one day, there are the occasional whispers. But spoiler alert: teams that are rug pulling don't continuously become more and more active on their github repository month after month.

There are some things to be optimistic about if you're investing in ETH, and more and more projects continue to use the blockchain, which only further solidifies its place in crypto. That being said, if you're looking to swing trade and buy in at the perfect bottom, Santiment's top metrics have pointed to more opportune times and better setups than what we are seeing currently.

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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.