According to a recent analysis by blockchain analytics firm Santiment, Ethereum has been quietly gaining traction since its correction from the $2,132 peak it reached on April 16, 2023, a little over three months ago.
In a blog post published earlier today, Santiment notes that the psychological support level of $2,000 is a significant marker, with traders’ optimism for the second-ranked asset increasing as it edges above this threshold, and skepticism growing when it struggles to surpass it.
Santiment observes that in the wake of Bitcoin’s dominance in June, spurred by the bullishness of Blackrock and other ETF introductions, Ethereum has made modest gains against Bitcoin’s price. However, the +4.8% swing against BTC isn’t something that has traders jumping for joy.
Interestingly, Santiment points out that the lackluster price action of Ethereum has led to a decrease in discussions about the asset, bringing it to its lowest level since mid-May 2023. But is this a cause for alarm? Santiment suggests not necessarily. Historical data suggests that altcoins often perform best when traders are preoccupied with other more attractive assets, and currently, that asset is XRP.
Santiment indicates that a potential sign of an impending price bottom could be an increase in loss-making transactions compared to profitable ones. At present, the ratio of on-chain transaction volume in profit to loss still leans towards profit-taking, but not by a significant margin. If Ethereum’s price dips further, panic selling could trigger a buying spree.
When analyzing trader behavior, Santiment considers the sentiment of both short and long-term Ethereum traders. Currently, addresses active in the past 30 days show an average return of -0.35%, essentially breaking even. However, long-term traders active over the past year are enjoying an average return of +14.9%. The most promising opportunities often arise when both these percentages are deep in the negative. However, with both figures hovering around neutral, it’s far from a bad time.
One encouraging sign Santiment highlights is that Ethereum coins are predominantly being held in self-custody, with less than 7% of coins on exchanges. This reduces the likelihood of massive sell-offs, boosting long-term confidence in the asset, which experienced a somewhat disappointing halving in terms of price in September 2022.
Santiment notes that the Ethereum community is unusually quiet at the moment, but this could be a good sign. Often, positive developments occur when the community’s attention is diverted to other top market cap assets like XRP and LINK. Patience often reaps rewards, and there’s no reason why Ethereum can’t make a move to surpass $2,000 again sometime in August, or even before the month ends, according to Santiment’s analysis.
At the time of writing, Ethereum is trading at around $1,887 down 2% in the past 24 hour period.
Source: Read Full Article