Will ETH addresses support Ethereum all the way to the top?
- ETH holders started to sell their holdings despite incurring losses
- On-chain activity on the network declined due to high gas prices
Following the Shapella Upgrade, the price of Ethereum [ETH] noted significant corrections. In fact, data from Santiment revealed that ETH holders have been impatient due to this and are opting to sell. Even if it means incurring losses.
ETH holders lose their patience (and profits!)
Santiment’s findings indicated that since 20 April, there has been a notable trend of traders moving their coins below their acquisition prices. It occurred three times more often than movements above the purchase price.
A prolonged sell-off trend may potentially decrease the demand for Ethereum, which could further drive down its price.
Furthermore, selling at a loss could fuel a negative perception for Ethereum, which may lead to a loss in investor confidence and cause long-term damage to its value.
If a significant number of holders continue to sell their Ethereum holdings, it could result in increased supply of the asset, further impacting its price negatively.
The hike in sell-offs of ETH was accompanied by a decline in on-chain activity. This happened due to the fact that gas prices have started to increase materially. According to Glassnode’s data, the median gas price for Ethereum just hit a 10-month high of 43.641 GWEI too.
Additionally, there was also a decline in DeFi activity on Ethereum as L2s managed to take ETH’s market share in the DeFi space.
Realistic or not, here’s ETH’s market cap in BTC terms
Interestingly, the total value of stablecoins on the Ethereum network also recorded a significant decline of $13 billion, touching a total of $73 billion over the last quarter.
This decrease was primarily driven by a drop in the supply of USDC, which saw a brief de-pegging that led to a reduction of $10 billion in its supply. Additionally, BUSD faced outflows of $5 billion following Paxos’ announcement of ending its partnership with Binance.
Some remain hopeful
Despite the dip in activity on the Ethereum network and the high sell-offs of ETH, the number of non-zero addresses accumulating ETH continued to rise.
— glassnode alerts (@glassnodealerts) April 22, 2023
Long-term holders of ETH who believe in the future roadmap of Ethereum may be the source of this activity. Their optimism might have stemmed from upcoming developments, such as proto-dank sharding, which is set to be added to the Ethereum network in the future.