Data from two on-chain indicators can be consulted to know whether ethereum‘s latest rally can continue or not.
ethereum has enjoyed a strong rally of over 12% in the last week
Like the rest of the cryptocurrency market, ethereum has seen a rally over the past few days. Although the coin’s bullish momentum has not been as strong as bitcoin‘s, its 12% weekly gains are still significant.
Yesterday, the asset had seen even bigger profits as its price had surpassed $1,850. However, in the last day, eth has noticed some decline as it is now trading below the $1,800 level.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Will-the-Ethereum-rally-continue-These-could-be-the-factors" alt="ethereum price chart” width=”1534″ height=”869″ loading=”lazy”/>
eth has registered some sharp growth in recent days | Source: ETHUSD on TradingView
Following the pullback, some investors have been wondering if ethereum‘s rally is over for now or if there is hope to continue. Santiment’s on-chain data may contain some clues in this regard.
eth Swap Supply Has Plunged, While Whale Transfers Soared
in a new mail In X, on-chain analytics company Santiment has analyzed two important eth metrics. The first of these is the “whale transaction count,” which tracks the total number of ethereum transactions that are worth at least $100,000.
Generally, only whale entities are able to move such a large amount of the asset with a single transfer, so transactions of this scale are assumed to reflect the behavior of these giant investors.
The following graph shows the trend of this eth indicator in recent months.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Will-the-Ethereum-rally-continue-These-could-be-the-factors.jpeg" alt="ethereum Whale Transaction Count” width=”2741″ height=”1768″ loading=”lazy”/>
Looks like the value of the metric has been quite high in recent days | Source: Santiment on X
As shown in the chart above, ethereum‘s whale transaction count has seen some pretty high values recently. This suggests that these large holders have been quite active in the market.
At the peak of this spike, the indicator had a value of 6,049, which is the highest number of daily transactions that whales have made on the network since April of this year.
The whale transaction count metric alone cannot indicate a bullish or bearish outcome for the cryptocurrency, as both sell and buy transfers are included in the count.
It is true, however, that whales will need to remain active for the rally to continue, as their contribution will provide the necessary fuel for this. So far, the whales have been really active, but it remains to be seen if they are still buying or if they are pivoting towards selling. The pullback in ethereum price may indicate the latter.
The other indicator that Santiment has attached to the chart is the “supply on exchanges,” which measures the percentage of the total circulating eth supply that is held in the wallets of all centralized exchanges.
You can see from the chart that this indicator has continued to fall since the rally began, implying that investors have continued to make net withdrawals from these platforms.
Currently, 8.41% of eth supply is held on exchanges, which is the lowest level since July 2015. Holders continuing to withdraw their coins may be a constructive sign for the cryptocurrency as it may be a sign that the buildup is underway.
Featured image by Bastian Riccardi on Unsplash.com, TradingView.com charts, Santiment.net
