The dominant sentiment over the crypto market continues to be fear, and Ethereum (ETH) has been highly affected by it, with capitulation signals in the Ethereum Network amid a massive loss of net capital to the second-largest cryptocurrency by market cap.
“This chart shows the aggregate 30-day Net Position Change of the largest and most dominant assets in the digital asset industry.
Net capital inflows can occur either via uplifts in the Realized Cap for the major assets BTC, ETH or via growth in stablecoin supplies considering USDT, USDC and BUSD.
The realized cap is used for the major network assets as it is a more accurate depiction of true net capital inflow/outflow from the market.
Realized Cap values each coin at the last transacted price, and thus accounts for relative coin liquidity, and filters out purely speculative trading occurring off-chain.”— Glassnode (chart description)
Fear and capitulation on Ethereum
Notably, this is just another signal of a massive capitulation event taking place among ETH investors. In the last few days, other signals were also observed, such as the ‘historic anomaly’ of Daily Active Addresses (DAA) peak to an 8-year high of over one million DAA in a single day.
More data from Glassnode also shows that Ethereum is reaching monthly lows in the number of addresses receiving ether from centralized exchanges, meaning investors are not withdrawing as much as before, which could also indicate fewer people buying ETH.
When looking at the ratio between long and short positions being built on ETH derivative pairs, data retrieved by Finbold from Coinglass shows dominance for short positions since September 10 in the 4-hour chart.
In this context, general sentiment from different fear and greed indexes all point towards a bearish sentiment of fear to cryptocurrencies. However, an old mantra from trading analysts suggests that these are usually the best times to start building and holding positions for the long term.
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