According to recent data from crypto-analytic firm Santiment, the Ethereum network has reached an eight-month high in active deposits.
This metric includes all incoming and outgoing transactions involving deposit addresses, including user-to-exchange and exchange-to-wallet transactions.
However, this surge in deposits could potentially lead to increased volatility in Ethereum’s price. Such volatility could have a similar impact as the blockchain’s transition from PoW to PoS during Merge or FTX’s collapse.
Despite the widely expected 25 basis point interest rate hike by the Fed, Ether’s price has remained stagnant within a narrow range due to low trading volume. The Shapella upgrade, which took place on April 12th, also failed to impress investors, as the asset only increased by 3% after the event.
While it is unclear which direction Ether’s price will take in the short term, data suggests that there is increased selling pressure on the asset. Whales holding 1,000 to 10,000 ETH have offloaded a significant amount of tokens over the past two weeks, which has contributed to the suppression of the price.
Furthermore, on May 2nd, ETH saw a transfer of $505 million to crypto exchange Binance. This level of exchange inflow was last seen before the Merge and is generally considered a bearish indication, as investors depositing their ETH tokens on exchanges are typically preparing to sell.
Image Credit: Shutterstock
Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.
