Santiment wondered if this was a good time to buy Ethereum (ETH).
🎢 #Ethereum has been quite a roller coaster these past few hours, and our team is looking for signs of crowd capitulation as a clear signal that it's buy time. Read our study on $ETH's sentiment, exchange inflow, age consumed, average fees, & more. 👇 https://t.co/6kGuoUQSpp pic.twitter.com/I7y6tZSrMK
— Santiment (@santimentfeed) June 9, 2021
Recalling that in the last few hours the price of ETH has been on a roller coaster, going from $ 2,500 to $ 2,300, then climbing back to nearly $ 2,600 and falling back to $ 2,400, the Santiment team went looking for signs of “crowd capitulation.” ”As signals that it might be time to buy. They found four.
They first looked at sentiment on social networks. They found that it is very low and bearish right now. From the graph they deduce that, usually, the price stops falling when it reaches such bearish levels.
So the social sentiment on Ethereum could be in a capitulation phase.
The second clear sign of capitulation is the spike in ETH inflows on exchanges during the current dip. In this regard, they claim that, historically, large inflows of tokens on exchanges have often preceded rapid price growth.
The third metric examined is the so-called “age consumed”, ie the movement of previously inactive ETH. There have been several peaks in this metric in recent days, and this could be confirmation of capitulation.
Another clear sign of capitulation are the liquidations on Maker DAO, where a total of 13,000 WETH were liquidated.
Santiment, however, also looked at a fifth metric, namely transaction commission costs.
In this case, although there has been a decline, this has been very limited, so much so that there are no signs of capitulation on this metric.
So there is a capitulation visible only on some metrics, while others do not worry.
Santiment is not bent on making predictions on the future trend of the price of ETH, but from the data it has published it seems to subtly suggest that the current situation is in effect a situation of capitulation, or that it is going in that direction. The key point is probably the highlighting that, usually, the price stops falling when it reaches such low levels.