Source : coingape.com
The world’s second-largest cryptocurrency Ethereum (ETH) recently touched a new all-time high above $4800 and is currently flirting close to those levels. While there have been expectations of ETH reaching $5000 levels very soon, the network congestion and high gas fee prove to be a kind of barrier.
It’s difficult at this point to say in which direction Ethereum (ETH) will move. On-chain data provider Santiment reports that the Ethereum address activity is up by 48% after the number of unique ETH addresses bottoming out in late September.
Furthermore, Crypto Quant CEO Ki-Young points out that the ETH supply in the market isn’t increasing anymore. Post the London hardfork, the rate of ETH supply has become almost zero. thus, Ethereum is turning out to be a scarce asset that can be a bullish signal for the world’s second-largest crypto.
$ETH supply doesn’t increase anymore.
Its rate of change became almost zero after the London hard fork.
Just like Bitcoin, ETH is now a scarce asset with limited supply.
— Ki Young Ju 주기영 (@ki_young_ju) November 11, 2021
However, the ETH price action and its trading volumes have been forming a bearish divergence recently.
On-Chain Bearish Indicators for Ethereum
On-chain data provider Santiment reports that there’s a strong bearish divergence between the ETH price and its trading volume. Although the Ethereum trading volume has been trying to pick up with the price, it hasn’t succeeded well and instead moved down. This is particular true since the end of October.
A similar scenario appears for Ethereum (ETH) social volume and the ETH network profit and loss. The on-chain data provider Santiment notes:
A bunch of long lasting divergencies is pointing us to idea that we need to go down. These are really worrying. We see network activity going down even though the price is pushing up.
People too relaxed to take profits even though ETH is going up (visible in NPL). There is a good chance they will be punished.
There is 50/50 chance market quite often moves up one more time after divergence. Just to confuse traders.
It will be interesting to see as to what price action does Ethereum follows from here onwards.