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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Ethereum Bearish Signal: Exchange Deposits Hit 8-Month High

Keshav Verma
Keshav Verma
2 years ago
3 mins read
Ethereum Bear

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On-chain data shows the Ethereum exchange deposits have hit an 8-month high, a sign that could be bearish for the cryptocurrency’s value.

Ethereum Active Deposits Metric Has Observed A Surge Recently

According to data from the on-chain analytics firm Santiment, the current values of the indicator are the highest since the Merge back in September 2022. The “active deposits” is an indicator that measures the total number of Ethereum addresses that are taking part in an exchange deposit transaction.

This metric only tells us about the unique number of such addresses, meaning that if an address takes part in more than one deposit transaction, its contribution to the indicator’s value is still only one.

Setting this restriction provides a more accurate representation of the trend in the wider market, as the unique number of addresses can be thought of as the number of users participating in these transfers. Without this limitation, just a few traders making a large number of back and forth transactions could skew the metric.

When the indicator has a high value, it means a large number of addresses are getting involved in deposit transactions right now. As one of the main reasons why investors deposit to these platforms is for selling-related purposes, this kind of trend can have bearish consequences for the price.

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On the other hand, low values of the metric imply not many investors are making deposit transfers currently. Such a trend can suggest there aren’t many sellers in the market at the moment.

Now, here is a chart that shows the trend in the Ethereum active deposits over the last few months:

Ethereum Active Deposits

Looks like the value of the metric has shot up over the last couple of days | Source: Santiment on Twitter

As displayed in the above graph, the Ethereum active deposits have spiked during the past few days. This suggests that a large amount of users have started making deposit transactions to the exchanges recently.

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Before this spike, the metric had been in a decline and had hit relatively low values, implying that the appetite for using exchanges had been shrinking back then. This surge in the active addresses thus signals a change in the market mentality.

At the peak of this spike, the indicator assumed a value of 9,193, meaning that there were 9,193 unique deposit addresses on exchanges. This level is the highest the metric has been since the September 2022 “Merge,” which transitioned the network towards a Proof-of-Stake (PoS) consensus system.

The current values of the active addresses are also comparable to those observed during the FTX crash back in November 2022. Both these events saw the price becoming quite volatile, so the indicator having such high values right now may also mean that Ethereum could face similar bearish volatility in the near future.

ETH Price

At the time of writing, Ethereum is trading around $1,900, down 1% in the last week.

Ethereum Price Chart

ETH has stagnated recently | Source: ETHUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Read more

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

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