Ethereum (ETH) has seen a series of corrections in recent weeks, following a rally in recent months.
According to a recent report from Santiment, investors are actively depositing ETH on various cryptocurrency exchanges, and this activity has reached its highest level in the last eight months.
While this trend may suggest growing interest in the cryptocurrency, it also indicates that the ETH price may experience increased volatility in the near future.
As more investors deposit their ETH on exchanges, this influx of supply can affect demand and cause fluctuations in the market.
In other words, the increase in active ETH deposits may be a harbinger of possible price turbulence, which could affect investors’ portfolios.
Increase in active ETH deposits and increase in volatility
Santiment’s team of analysts is currently investigating the recent increase in active ETH deposits and its possible impact on the market.
according to their initial findingsthis increase in deposits is likely to be an indication of the next increase in price volatility.
😮 #etherealActive deposits just hit an 8 month high. As we investigate the most likely cause, we can currently say that this will likely herald the next surge. $ETH volatility, similar to the result of spikes during the #bind & #FTX collapse. https://t.co/aBeHQudM52 pic.twitter.com/oHeypfUPvJ
— Santimento (@santimentfeed) May 5, 2023
This phenomenon has been observed before, for example, with the introduction of the Merge update in September 2022 and the FTX crash in November 2022, which caused a significant impact on the ETH price.
Currently, the exchanges have recorded close to 9,200 unique ETH deposits, which is the highest amount since the introduction of the merge update last year.
The increase in active deposits, coupled with current market trends, suggests a potential turbulent period for ETH traders and investors.
Record amount of ETH burned along with rising prices
Ethereum continues to rise in value, with CoinGecko reporting a current price of $1,981.25 per ETH. The last 24 hours alone has seen an impressive 4.2% rally, while over the course of the past week, the rally has been even more remarkable, rising 4.9%. It is an exciting time for investors and traders keeping an eye on this thriving market.
As the price of Ethereum continues to rise, an unprecedented amount of ETH has been burned in the last 24 hours, according to David Hoffman, an Ethereum enthusiast.
ETHUSD yet to hit the $2K mark. Chart: TradingView.com
in a recent tweetreported that a staggering 10,300 ETH had been consumed, with roughly half of that amount used for Uniswap trades.
24 hours $ETH burn shredded disc
10,300 ETH burned and rising pic.twitter.com/9d6eJSnpe3
— DavidHoffman.eth 🛡️🦇🔊 🏴 (@TrustlessState) May 5, 2023
The increase in ETH burning is attributed to the current meme coin season taking place predominantly on the Ethereum mainnet, resulting in an increase in gas fees and a subsequent increase in ETH burning.
In the last 30 days, the ETH supply has decreased by 0.80%, and meme season could double the rate of consumption.
This metric suggests that the longer meme season lasts, the more ETH will be burned, which could have a positive impact on ETH holders, regardless of their stance on meme coins.
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