Ethereum hits exchanges amidst rising negative sentiment ahead of the Merge
- Ethereum outlook among investors has turned negative based on data from Santiment.
- There is a spike in inflow of Ethereum to exchanges, increasing the selling pressure.
- Analysts believe Ethereum remains at risk of decline, as the altcoin posts nearly 10% losses overnight.
Ahead of Ethereum’s transition to proof-of-stake, there is a spike in ETH inflow to exchanges. As Ethereum piles up across exchange wallets, analysts note a shift in sentiment among traders.
Also read: Ethereum is dirt cheap ahead of the Merge, claims analyst
Ethereum supply on exchanges climbs steadily
In the weeks leading up to Ethereum’s transition from proof-of-work to proof-of-stake, the altcoin’s supply on exchanges has climbed steadily. 13.78% of Ethereum’s total supply is on exchanges based on data from crypto intelligence platform Santiment.
The steadily climbing supply is indicative of an increase in selling pressure on exchanges. With higher Ethereum reserves on exchanges, more ETH is available to sell, putting the altcoin’s price at risk of decline.
Ethereum supply on exchanges
Sentiment on Ethereum turns negative
Based on data from Santiment, weighted social sentiment, a metric that combines the positive/negative commentary, and multiplies by the amount of social volume has turned negative. Typically when weighted social sentiment gets too high, it coincides with a price top and when sentiment is negative it coincides with a bottom.
The weighted social sentiment of Ethereum dropped to -0.54, indicating a shift in sentiment from positive to negative, in the weeks leading up to the merge.
Weighted social sentiment
Analysts predict decline in Ethereum price
PostyXBT, a leading crypto analyst, identified that Ethereum’s structure has broken down. The analyst argued that 'bounces are for shorting' vibes are back. Ethereum’s market structure and price trend has changed, and the overall outlook is bearish.
ETH Perpetual Futures Contracts
McKenna, a crypto analyst and trader argues that Ethereum is poised for a liquidity grab once the altcoin plummets below $1,460. FXStreet analysts believe that Ethereum could plummet to $1,284 in order to collect liquidity. For more information and specific conditions, check the video below:
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
