A recent tweet released by the analysis platform Santiment shows that Ethereum's active deposits have just reached an 8-month high. In ordinary markets, the progress of such activities is usually welcomed by market participants
A recent tweet released by the analysis platform Santiment shows that Ethereum's active deposits have just reached an 8-month high. In ordinary markets, the progress of such activities is usually welcomed by market participants. However, active deposits are not a simple indicator.
It considers both incoming and outgoing transactions. This means that transactions from personal wallets to deposit addresses, as well as transactions from deposit addresses to primary exchange wallets, will be recorded. So it is unfair to just look at its peak and draw a conclusion, because it simply means that participants only become active at this moment.
To gain a clearer understanding of the bias, let's study the net flow of the exchange. Earlier this week, a significant green peak involving 302kETH appeared on the K-line trend chart. In fact, this is the highest level since the third quarter of 2022. This means that people may be selling in large quantities, which is clearly not a good sign on any given day.
However, it seems that emotions are changing now. Today, May 5th, a multi day high red peak involving 168.7kETH was recorded. This indicates that accumulation is also occurring.
Is the Ethereum fluctuation pump in the store?
Therefore, regardless of which side of the scale becomes heavier, the price will dance with the melody of the music. However, it is certain that there will be a surge of volatility in the Ethereum ecosystem, similar to what we saw during the FTX collapse and merger. Therefore, it is best to prepare market participants for this and act cautiously. Specifically, Santiment predicts that,
We can currently say that this may indicate an upcoming increase in ETH volatility, similar to the peak results during the Merge& FTX crash
Since mid April, Ethereum has been trading within a narrow range. It failed to break through its direct resistance level near $1.915k. As of the time of publication, the trading price of Ethereum was below the psychological threshold of $19000, at $189300.
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