Crypto analytics firm Santiment is warning investors that certain metrics show sell pressure on the horizon for top smart contract platform Ethereum (ETH).
Though ETH has bounced back from the latest overall crypto market dip, Santiment says in a new blog post that the rising supply of ETH seen on exchange platforms is a bear flag.
“Over the past few days, we are seeing large spikes in ETH supply on exchanges, suggesting that a decent amount of sell pressure is looming.
Looks like sellers are using every price pump to exit their positions where possible (especially if they missed a chance to sell previously).”
The insights firm further says that the MVRV 7D metric, which measures the short-term profit and loss of holders, shows that ETH is in a “danger zone.”
“All short-term holders are in the profit at the moment – which could incentivize them to take some profits.”
However, Santiment points to Ethereum’s network growth and daily active addresses as positive developments that may signal the blockchain is gaining new users.
“ETH’s Network Growth is seeing some divergence, as price drops, we are seeing an increase in network growth, which is kind of unusual. Could this be a sign of cautious (those that don’t FOMO during price rises) new participants finally entering?
ETH’s daily active addresses remain healthy-looking, [the] network is still very much active regardless of the price action we are seeing.
Good sign so far.”
Ethereum is exchanging hands at $3,890 at time of writing, a 6% increase from its seven-day low of $3,660.
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