Blockchain analytics platform Santiment says a key statistic is sending a signal suggesting a crypto market reversal is on the horizon.
Sanitation say that discussions of the use of certain crypto terms on social media platforms are rapidly cooling, indicating that the latest market dip is close to bottoming out.
“Crypto discussion rates on Twitter, Telegram, Discord, Reddit and 4Chan are falling as traders show signs of disinterest. Take these drop-offs as a sign that markets are moving closer to capitulation, which is traditionally bullish.”
Then sanitation notes that the supply of Ethereum (ETH) on crypto exchanges is approaching an all-time low, suggesting that the potential of future sell-offs for the leading altcoin may be limited.
However, the analytics firm warns that the next few days could be rocky for Ethereum as ETH deposit transactions skyrocketed to close out the week.
“Ethereum supply on exchanges continues to fall to record lows, now at just 9.47%, implying a lower risk of a future sell-off. However, the number of active deposit addresses just hit the highest level since March, implying that this weekend could be volatile.”
Ethereum is worth $1,836 at the time of writing, down 0.9% in the past 24 hours.
The blockchain analytics platform also monitors Tether (USDT) whale and shark activity. According to Santiment, whales and sharks have USDT accumulated the largest amount of Tether in history and have taken most of the stablecoin from exchanges.
“There is an interesting correlation between Tether’s top shark and whale addresses and the number of coins on exchanges. Wallets with $100,000 to $10 million in USDT now hold more than $16 billion, with most of these coins disappearing from exchanges into self-custody.
Finally, Santiment says the Bitcoin (BTC) network is seeing more active addresses. Active addresses show the number of individual addresses that participated in the transfer of BTC on a given day.
According to Santiment, there could be more and more active addresses seen as a bullish signal, especially if accompanied by declining deposits, as it indicates growing coin utility without the risk of a potential sell-off.
“With volatility rising all over the market, Bitcoin usage levels have increased quite drastically. The number of unique addresses interacting on the BTC network has surpassed one million each in the past two days, the first time since April 21.”
Bitcoin is trading at $26,450 at the time of writing, down 0.6% in the past 24 hours.
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