Ethereum (ETH) experienced a significant price drop, plummeting to $1,540. This marks the first time the cryptocurrency has reached this low since March 12th. But what’s even more intriguing is the concurrent movement of large quantities of “stagnant” ETH from old wallets.
What you'll learn 👉
The Data
According to data analytics firm Santiment, this price drop coincided with a surge in activity involving long-dormant Ethereum wallets. These wallets, which had been inactive for extended periods, suddenly transferred large amounts of ETH. This is a noteworthy development because it suggests that long-term holders are liquidating their positions.
Source: Santiment – Start using it today
Mean Age and Capitulation
One key metric to consider here is the “mean age” of Ethereum held in wallets. The mean age has been in a continuous dip, which is often interpreted as a sign of capitulation. In market terms, capitulation refers to the point when investors give up any previous gains in any security or market by selling their positions during periods of declines.
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Show more +Foreshadowing Reversals
The combination of a falling mean age and declining prices is a classic indicator that often foreshadows market reversals. In other words, when long-term holders begin to sell, it can be a sign that the asset is undervalued, setting the stage for a potential price rebound.
The Takeaway
While it’s too early to definitively say whether Ethereum’s price will bounce back soon, the current market signals — particularly the movement of stagnant ETH and the declining mean age — are phenomena that seasoned investors are watching closely. These could either be early signs of a market bottom or an indication of further declines to come. Either way, the market is at a pivotal moment, and the actions of long-term holders could significantly influence Ethereum’s trajectory in the days ahead.
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