Evaluating Ethereum’s network and ETH’s current demand levels
- Ethereum’s TVL continued bleeding as the market extended its uncertainty.
- ETH’s ecosystem maintained some health and top whales have been buying the dip.
The crypto market just concluded another one of its most dormant weeks so far in 2023. Ethereum [ETH] and other top networks have experienced a significant slowdown in activity as is usually the case under such circumstances.
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The impact of the current market conditions was evident in multiple facets of the Ethereum network. This includes its TVL, which was a long way from its historic high. It had a total value locked of $21.42 billion at the time of writing, which is a stark contrast compared to its historic peak above $108 billion in 2021.
Despite the slightly improved conditions so far this year, the market is still in a state of caution. As such, we have seen significant outflows in TVL since April. An indication that investor confidence in ETH’s bullish potential is not there yet.
Regardless of the slow and negative TVL growth in the last few months, there are some areas in ETH’s journey this year that inspire some more confidence. For example, Ethereum’s total value locked in ETH deposit contracts just achieved a new historic peak at over 28.7 million ETH.
— glassnode alerts (@glassnodealerts) September 9, 2023
The total value locked also confirms that Ethereum’s ecosystem is still experiencing healthy network activity. But how is ETH fairing especially as the market appears to be stuck in limbo?
ETH supply distribution reveals something interesting about whale activity
Now that ETH’s total value is up, let’s take a look at what has been happening with whale activity. According to its supply distribution metric, addresses holding over 10 million ETH (denoted in red) have been accumulating in the last 4 weeks. This category controls the largest share of ETH’s circulating supply at 23.55%.
Addresses in the 10,000 to 100,000 ETH category have also been accumulating ETH since the start of September. However, the other top whale categories have been contributing some sell pressure which may explain why the sell pressure has been canceling out the prevailing demand.
Read about ETH’s price prediction for 2024
So, what’s next for ETH?
ETH’s price action has been stuck at its current support level since the start of September. It exchanged hands at $1,633 at press time.
ETH’s money flow indicator already shows that liquidity has been flowing into ETH. In other words, there has been some accumulation within the current support zone, highlighting the gradual return of optimism. However, caution is still warranted since the market is not out of the woods yet.