• ETH traders have been exiting the market in large numbers following a rally in its price, according to on-chain assessment of Net Taker Volume metric.
• Market demand for ETH has weakened as its Open Interest and daily addresses created fell by 5% and 88%, respectively.
• Despite this, many investors maintain a positive outlook due to the forthcoming Shanghai Upgrade.
ETH Traders Exiting the Market
On-chain assessment of the Net Taker Volume metric has revealed that following the recent rally in the price of Ethereum [ETH], traders have been exiting the market in large numbers, with the highest volume of exits seen since the collapse of Terra-Luna. According to CryptoQuant analyst Maartunn, the Net Taker Volume metric tracks the aggressiveness of market sellers and buyers for a specified crypto asset. The metric calculates the difference between ‚Taker Buy Volume‘ and ‚Taker Sell Volume‘ and provides insights into the behavior of market participants who use market orders.
Market Demand Weakening
Data from Santiment shows that after ETH crossed $1600 price mark, new demand for it weakened as daily addresses created fell by 88%. Similarly, data from Coinglass reveals that during that period, ETH’s Open Interest fell by 5%. This decrease in an asset’s Open Interest often suggests a shortage of investor attraction to it potentially resulting in a drop in price.
Suggestions for Hedge
CryptoQuant’s Maartunn advised: „The strongest signal of this indicator is when prices are still relatively high but Net Taker Volume is deeply red.“ He further noted: „This doesn’t mean that Ethereum can’t bounce in short term but as long as Net Taker Volume shows negative values, it better to sell dip other than buy dip.“
Positive Outlook Due To Shanghai Upgrade
Despite this bearish trend, many investors maintain a positive outlook due to upcoming Shanghai Upgrade which might work wonders on price front.
Ethereum [ETH] traders have been exiting their positions en masse since May 2022 according to on-chain assessments related to its Net Taker Volume metric. Simultaneously, new demand has weakened significantly as shown by decreased Daily Addresses Created and Open Interest figures – both falling by 88% and 5%, respectively. Nevertheless, many remain optimistic about Ethereum’s future prospects given its upcoming upgrades such as Shanghai Update which may turn around weak demand or at least stabilize prices going forward.