Cointelegraph Consulting: Ethereum’s on-chain activity surges and bullish sentiment spikes

Is Ethereum’s recent bullish online sentiment good or bad? Short-term holders are now in the black, is a ‘sell zone’ approaching?

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The latest findings by Santiment, published in Cointelegraph Consulting’s biweekly newsletter, indicates that discussions around Ethereum have switched from highly bearish to predominantly bullish. Historically, this hasn’t meant good news for the token’s price.

Ethereum’s on-chain activity, measured by unique daily addresses, has rebounded from its nose dive at the end of summer. The latest surge has taken Ethereum to a 3-week high of 420,610 addresses per day — marking a 25.2% growth compared to the day prior.

Another noticeable trend is Ethereum’s 365-day dormant circulation, which tracks the renewed movement of all tokens that have previously not changed addresses for more than a year. This number has stayed relatively low since the October 7th bottom, with a recorded daily average of just 13,438 ETH, suggesting that long-term holders are still sitting on their bags despite the recent price bounceback.

Ethereum’s Network Profit/Loss, which computes the average profit or loss of all coins that change addresses daily, are a good way of seeing which holders are panic selling at a loss. Amid a market-wide crash on March 13th, 2020, Ethereum’s network realized a cumulative loss of -$2,932,200 based on NPL: a 3-month low. In a similar fashion, Ethereum’s network realized a cumulative loss of $-998,998 on October 7th, shortly before the coin bounced back above $350.

A number of Ethereum’s bottoms over the past 2 months featured the same behavioral pattern, suggesting a wave of panic sell-offs and short-term redistribution of Ethereum to strong hands — allowing for a more sustained bounce back. This metric remains important as statisticians can calculate the “blood in the streets”. 

Ethereum’s 30-day MVRV ratio, which tracks the average profit (or loss) of all addresses that acquired ETH in the past 30 days, indicates that the short-term ETH holders are, on average, currently up +8% on their initial investment.

At present, Ethereum’s 30-day MVRV ratio is still some ways away from what has historically been considered a ‘danger zone’, marking the levels at which short-term holders have looked to offload their bags in the past.

Read the full newsletter edition here to get the entire scoop, complete with detailed charts and images.

Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. With market intelligence from one of the industry’s leading analytics providers, Santiment, the newsletter dives into the latest data on social media sentiment, on-chain metrics and derivatives.

We also review the industry’s most important news, including mergers and acquisitions, changes in the regulatory landscape, and enterprise blockchain integrations. Sign up now to be the first to receive these insights. All past editions of Market Insights are also available on Cointelegraph.com.

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