Journalist
Posted:
- The ETH liquidity on Uniswap suggested that bullish sentiment was building.
- Alternating currents point to selling pressure. Could whales play the market again?
Ethereum [ETH] holders are again speculating on the next move thanks to the consolidation in the first week of September. However, information is king, especially in the blockchain world, and having information upfront can eliminate some of the guesswork.
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On-chain market data can provide insights into the next trend for the majority of market players. In the case of ETH, a recent Glassnode analysis can provide just that. The analysis looks at the liquidity concentration on Uniwap pools and the findings are quite interesting.
According to the analysis, approximately 30.4% of ETH liquidity is within 11% of the cryptocurrency’s current price range. In addition, most Uniswap users expect an increase of at least 8.6% and a decrease of up to 2.7%.
Traders have also set aside a second tier of liquidity in case a fall of up to 8.5% to the next level of support occurs. After that, an increase of more than 23% is expected.
The highest concentration of liquidity in the #uniswap Pool (approximately 30.4% of capital) is within an 11% price range, with an expected downside of -2.7% and an increase of +8.6%.
A second level of liquidity is positioned with a buffer of -8.5% to the downside, and a buffer of +23.7% to… pic.twitter.com/QGx3JaWgEa
— glassnode (@glassnode) September 6, 2023
Based on the above analysis, we can see that Uniswap traders were more inclined towards bullish expectations for ETH. In other words, chances are that most Uniswap users interested in ETH would buy at the current discounted price level.
Assessment of the state of ETH sentiment
ETH’s longs versus shorts ratio reflected the observations about Uniswap liquidity. According to Coinglass, 32% of ETH traders were bullish, while 16% were very bullish in the past 24 hours.
Source: Coinglass
On the other end of the spectrum, 19% of ETH traders were bearish, while 14% were very bearish. This means that the bullish sentiment has outweighed the bearish sentiment over the past 24 hours. The remaining percentage represented neutral sentiment.
How much are 1,10,100 ETHs worth today?
We also see demand for leverage making a comeback after declining since mid-August. The estimated leverage ratio has risen steadily since September 2 to the time of writing.
However, it is worth noting that despite the uptick, the prevailing level of debt was still relatively low compared to the levels observed in the first half of August.
Source: CryptoQuant
While the above analysis suggested a potentially bullish outlook, currency flows still favored short-term selling pressure. Currency inflows have increased over the past three days. This reflected the large outflow recently observed from whale addresses to exchanges.
Source: CryptoQuant
Meanwhile, foreign exchange outflows have slowed significantly over the past two days. A possible sign that the accumulation was slowing down. On the one hand, these findings could indicate that selling pressure is mounting again.
On the other hand, this could be a trap for whales wanting to set up a bear trap. Whale activity will determine the next big price move.