- Santiment notes that ETH holders are sensitive to the possibility of more selling pressure.
- ETH on-chain data shows top addresses protecting ETH amid whale selling pressure.
Ethereum [ETH] started this week with a sharp pullback compared to the previous bullish attempt in the last week of September. However, recent observations can provide insight into current demand dynamics and where ETH is headed.
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ETH, like most other cryptocurrencies, has been going through a slow phase in the market. There is now concern that the bears will regain dominance, leading to capitulation.
A recent analysis from Santiment highlighted the impact of these concerns, as ETH holders recently faced panic selling. The analysis showed that despite increasing short-term selling pressure, the market was still in a profit-taking mood.
📉 #Ethereum, #ShibaInuAnd #Sushiwap Traders showed some mild signs of panic yesterday, and their networks showed some of the highest levels of loss-taking (vs. profit) by traders all year. These are usually signs of a short-term recovery opportunity. https://t.co/lz6NsiH62o pic.twitter.com/HWzWvM5RHz
— Santiment (@santimentfeed) October 6, 2023
A few other cryptocurrencies had the same experience, including SUSHI and Shiba Inu. The panic among ETH holders after mid-week extended the cryptocurrency’s downside to 8% from the current weekly high. ETH fell to $1607 during the trading session of Thursday, October 5.
Santiment’s analysis also suggested the dip provided an opportunity for a near-term recovery. ETH was exchanging hands at $1648 at the time of writing, after rising 2.29% in the past 24 hours. This reflected Santiment’s statement that the dip would provide an opportunity for short-term gains.
Source: TradingView
Based on the price chart above, we see that ETH’s price action was limited between the $1544 and $1745 support bands. The recent turnaround in combination with the increase in liquidity as evidenced by the Money Flow Index (MFI). But what do on-chain metrics reveal about the current situation?
How much is 1,10,100 ETHs worth today?
Is ETH at Risk of Capitulation?
The declining confidence in ETH may have an important reason. The cryptocurrency discounted substantially from its mid-July highs to its most recent lows just before mid-September.
Several signals have indicated the possibility of a relief meeting. Instead, the country has struggled to maintain bullish momentum, an outcome that could risk capitulation.
Source: Glassnode
According to the chart above, ETH addresses holding at least 1,000 and 10,000 ETH were at three-month lows at the time of writing. Despite these findings, the Top ETH addresses have grown over the past four weeks. A sign that the biggest whales were still buying, protecting the cryptocurrency from even more downsides.
Source: Santiment
Capitulation is unlikely if the top addresses are still buying. This makes it a pretty important metric to keep an eye on. Meanwhile, a turn on the addresses holding at least 1,000 ETH could finally cause the bulls to experience less friction. Such an outcome could allow ETH to persist in its current low range in favor of more recovery.