Crypto analytics firm Santiment is weighing in on what could be in store for Ethereum (ETH) and red-hot Polygon (MATIC).
Santiment is revealing that Ethereum’s address activity is growing and that the quantity of active deposits has died down since the “panic selloff” of late May.
The firm also notes that crowd sentiment is currently bearish, which is “a good sign for the bulls,” according to the firm.
In addition, Santiment points out that gas fees on the Ethereum blockchain have decreased, returning to levels not witnessed since mid-January of this year. Low gas fees, notes Santiment, is bullish for the top smart contract platform.
“Ethereum is ranging at $2,800, and one of the positive signs for the number-two crypto asset is the fact that its fees are back to low mid-January levels. At just a $5.48 average gas fee per transaction, this allows traders to move assets more comfortably.”
Santiment adds that the number of ETH held collectively by the top ten Ethereum wallets is nearing an all-time high, which has historically been a particularly bullish signal for the asset.
“The top 10 Ethereum whale addresses are creeping toward a new milestone in terms of supply held. Currently holding 19.08m ETH, these top addresses previously held an all-time high of 19.25 million ETH three weeks before the price skyrocketed above $4,300.”
As for Ethereum-scaling solution Polygon, Santiment says MATIC whales who were selling into the rally are now re-accumulating during the correction.
“MATIC whales owning from 100,000 to one million tokens have been accumulating. Seemingly been dumping for a while into the rally. And now starting to buy this dip.”
While they are ultimately bullish on MATIC, Santiment points out that its Market Value to Realized Value (MVRV) metric is showing some signs that a further correction may be needed before it begins another major rally.
MVRV divides a coin’s market capitalization by its realized capitalization, which can show the average profit/loss of all coins currently in circulation according to the current price. Based on MVRV, MATIC is currently slightly overvalued, according to Santiment.
“Overall, MATIC’s MVRV is a problem and it’s going to remain a problem for a while. No matter what happens, further correction is needed until we move into the undervalued territory.”