2023-7-21 18:00 |
The on-chain analytics firm Santiment has explained that Ethereum’s underlying metrics may suggest that a return above $2,000 could soon happen.
Can Ethereum Surge Back Above $2,000 Anytime Soon?In its latest insight post, the on-chain analytics firm Santiment has looked into the various indicators of the asset to see what the near future outcome of its price might be.
The first metric of relevance here is the “social dominance,” which, in short, tells us what percentage of discussions on social media platforms related to the 100 largest assets by market cap in the sector are coming from Ethereum alone. The below chart shows the recent trend in this indicator.
As displayed in the above graph, the Ethereum social dominance has been on the decline recently as the asset’s price hasn’t been moving much. Generally, investors find sideways movement boring, so it would explain why social media users aren’t talking about the coin that much.
Currently, the indicator’s value is below 7%, which means that less than 7% of all discussions related to the top 100 assets involve the topic of Ethereum at the moment. This is a pretty low value, considering that ETH is the second-largest cryptocurrency in terms of market cap.
“Is this cause for concern? Not particularly,” explains Santiment. “In fact, we have had several backtests show that many altcoins thrive best when traders are distracted by the other shiny assets on the block at the time.”
While the low social dominance may allow for an environment where ETH can grow, another metric, the ratio between the profit and loss volumes on the network, may not be so favorable.
From the chart, it’s visible that this metric has a positive value currently, implying that profit-taking is the dominant force among Ethereum investors right now.
Usually, price rebounds become more likely whenever investors are selling at a loss, while declines may happen when profits are being realized. Though, nonetheless, the degree of the current profit-taking is relatively low at the moment, as the indicator isn’t far off from the neutral zero level.
A metric that may be significant for Ethereum’s hopes of an upwards move is the total amount of supply being held by the exchanges.
One of the main reasons why investors may deposit their coins to exchanges is for selling-related purposes, so whenever this metric goes up, it can prove to be a bearish sign for the asset. “With less than 7% of coins on exchanges, the likelihood of huge sell-offs occurring remains lower than usual,” notes the analytics firm.
In conclusion, Santiment thinks that based on these on-chain indicators, Ethereum has a chance of going back above the $2,000 level sometime in August, or even before the end of the current month.
ETH PriceAt the time of writing, Ethereum is trading around $1,900, down 5% in the last week.
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