Santiment is inquiring whether this is a good time to buy Ethereum (ETH).
🎢 #Ethereum has been quite a roller coaster these past few hours, and our team is looking for signs of crowd capitulation as a clear signal that it's buy time. Read our study on $ETH's sentiment, exchange inflow, age consumed, average fees, & more. 👇 https://t.co/6kGuoUQSpp pic.twitter.com/I7y6tZSrMK
— Santiment (@santimentfeed) June 9, 2021
Recalling that the price of ETH has been on a rollercoaster in recent hours, going from $2,500 to $2,300, then rising to almost $2,600 and falling back to $2,400, the Santiment team went looking for signs of “crowd capitulation” as signals that it might be time to buy. They found four.
First, they looked at sentiment on social media. They found that right now it is very low and bearish. From the chart they deduce that, usually, the price stops falling when it reaches such bearish levels.
So the social sentiment on Ethereum might be in a capitulation phase.
The second clear sign of capitulation is the spike in ETH inflows on exchanges during the current decline. They state that historically, large token inflows on exchanges have often preceded rapid price growth.
The third metric examined is the so-called “age consumed”, which is the movement of previously inactive ETH. There have been several spikes in this metric in recent days, which could be a confirmation of capitulation.
Another clear sign of capitulation are the liquidations on Maker DAO, where a total of 13,000 WETH were liquidated.
But Santiment also looked at a fifth metric, namely transaction fees.
In this case, while there has been a decline, it has been very small, so that there is no sign of capitulation on this metric.
Hence there is a visible capitulation only on some metrics, while others are of no concern.
Santiment is reluctant to make any predictions about the future trend of the ETH price, but from the data published they seem to be veiled in suggesting that the current situation is for all intents and purposes a capitulation situation, or heading in that direction. The key point is probably the highlighting of the fact that, usually, the price stops falling when it reaches such low levels.