Crypto intelligence firm Santiment says doubt surrounding Ethereum’s recent rally back above $1,800 may indicate that the top smart contract platform is finally breaking out.
An extreme level of skepticism surrounding a particular asset is a historically bullish signal in the crypto markets, notes Santiment, and many are questioning whether Ethereum (ETH) can actually remain above the $1,800 level this time around.
“Ethereum has wobbled its way back above $1,800, and the crowd has serious doubts on whether it’ll last. This extreme level of crowd skepticism is historically bullish for crypto coins.”
The crypto analytics firm adds in a blog post that negative sentiment on Twitter for Ethereum has hit a record high for the year.
Per Santiment, data also suggests that the number of Ethereum active addresses is growing, thus indicating greater network use.
Santiment adds that the quantity of ETH tokens moving to exchanges to be sold on the open market is dwindling, while the amount of Ethereum moving away from exchanges to cold storage wallets an decentralized finance (DeFi) platforms is increasing. The confluence of the two factors is particularly bullish for the second largest crypto asset by market cap, as the project mints a new all-time high above the $2,000 range.
“Ethereum’s supply on exchanges continues moving down, a great sign that more tokens are moving into hard wallets and DeFi.”
The cryptocurrency analytics firm also takes a look at Ethereum’s network value to transaction ratio (NVT) which determines whether a cryptocurrency is undervalued or overvalued. The NVT is calculated by dividing the network value (market capitalization) by the transaction volume on the Ethereum blockchain over the past 24 hours. The firm notes that Ehereum’s NVT is currently in semi-bullish territory.