Ethereum seems to be running low on gas as it edges towards capitulation. Recent weeks have been nothing but a stain on the vision endorsed by Buterin and his team. The altcoin king dropped to a 14-month low over the weekend as it continues to struggle.
“Far from home”
The Ethereum community was perplexed after learning that ETH dropped to $1,724 over the weekend. This is its lowest value in the past 14-months which only adds to the downswing observed in recent months. A Santiment tweet recently discussed that Ethereum is showing a “dramatically low” profit-to-loss transaction ratio over the weekend. The new 14-month low can be attributed for these low returns on the ETH transactions.
Source: Santiment
But this is how it’s been for Ethereum recently. It has been down 10% this week alone as it has fluctuated between the $1700 to $1850 range. The metrics are also suggestive of the downfalls of the network.
The daily active addresses data is showing concerning signs for the Ethereum community. This metric reached a monthly high of around 650,000 active addresses at the peak of the Terra collapse. The sudden increase is attributed to the discounted prices of ETH and volatility in the market causing panic among investors. The daily active addresses are currently showing an average of 450,000 this week.
Source: Santiment
Another metric is signaling a bearish patch for Ethereum. The MVRV Ratio (30 days) is currently stuck at 1.24 after poor performance in recent months. This is the lowest value for the index since early- August 2020. This often means that investors are holding large unrealized losses which is the case here as briefed above.
Source: Glassnode
Now we can move ahead to whale activity which is proving to be the last straw for investors. As seen in the chart below by Santiment, whales had been actively accumulating during price crashes earlier and dumping accordingly. Despite recent downswings, there has been a limited accumulation among the major “stakeholders” of ETH.
Source: Santiment
HODLers continue to double down
In a weekly update by Lucas Outumuro, he shed light on the ETH HODLer addresses during recent selloffs. According to Outumuro, IntoTheBlock’s Head of research, addresses holding Ethereum for more than a year have managed to acquire more than 50% of ETH in circulation.
Source: Lucas Outumuro/ IntoTheBlock
HODLers’ balances have moved inverse to price action. They had been decreasing their balances since September 2021, but began accumulating in January 2022. Since then, HODLers’ balance has grown following each large crash, reaching over 50% of all circulating supply for the first time since 2020.
Most of their recent accumulation came during Ethereum’s price struggles as it continues to struggle below $1,800. But the HODLers are keeping a long term perspective on their assets despite the recent market struggles.