Ethereum (ETH) Booming Deposits: Insights On Potential Price Outcome
Ethereum (ETH) has experienced a series of corrections in the last few weeks, following a rally over the past few months.
According to a recent report by Santiment, investors are actively depositing ETH to various crypto exchanges, and this activity has reached its highest level in the past eight months.
While this trend may suggest a growing interest in the cryptocurrency, it also indicates that the price of ETH may experience surging volatility in the near future.
As more investors deposit their ETH into exchanges, this influx of supply may impact the demand and cause fluctuations in the market.
In other words, the surge in active ETH deposits may be a harbinger of potential price turbulence, which could impact investors’ portfolios.
Surge In Active ETH Deposits And Increased Volatility
Santiment’s team of analysts is currently investigating the recent surge in active ETH deposits and its potential impact on the market.
According to their initial findings, this increase in deposits is likely an indication of the forthcoming rise in price volatility.
#Ethereum‘s active deposits just hit an 8-month high. As we research the most likely cause, we can currently state that this likely will foreshadow upcoming increased $ETH volatility, similar to the result of spikes during the #merge & #FTX collapse. https://t.co/aBeHQudM52 pic.twitter.com/oHeypfUPvJ
— Santiment (@santimentfeed) May 5, 2023
This phenomenon has been observed previously, for example, with the introduction of the Merge upgrade in September 2022, and the FTX collapse in November 2022, which caused a significant impact on the ETH price.
Presently, exchanges have recorded close to 9,200 unique deposits of ETH, which is the highest amount since the introduction of the Merge upgrade last year.
The surge in active deposits, coupled with the current market trends, suggests a possible turbulent period ahead for ETH traders and investors.
Record Amount Of ETH Burned In Conjunction With Price Rise
Ethereum continues to soar in value, with CoinGecko reporting a current price of $1,981.25 per ETH. The past 24 hours alone have seen an impressive rally of 4.2%, while over the course of the past week, the rally has been even more remarkable, with an increase of 4.9%. It’s an exciting time for investors and traders who are keeping a keen eye on this thriving market.
As the price of Ethereum continues to rise, an unprecedented amount of ETH has been burned over the past 24 hours, according to David Hoffman, an Ethereum enthusiast.
In a recent tweet, he reported that a staggering 10,300 ETH had been consumed, with roughly half of that amount utilized for Uniswap trades.
24hr $ETH burn record SMASHED
10,300 ETH burnt and rising pic.twitter.com/9d6eJSnpe3
— DavidHoffman.eth (@TrustlessState) May 5, 2023
The surge in ETH burning is attributed to the current meme coin season predominantly taking place on the Ethereum mainnet, resulting in a rise in gas fees and a subsequent increase in ETH burning.
Over the last 30 days, the supply of ETH has decreased by 0.80%, with the meme season potentially doubling the burn rate.
This metric suggests that the longer the meme season persists, the more ETH will be burned, which could positively impact ETH holders, regardless of their stance on meme coins.
-Featured image from Macro Hive