IMPORTANT POINTS:
- Ethereum lost $13 billion in days due to the dominant fear in the market.
- Signs of mass capitulation among ETH investors.
- Despite the fear, analysts suggest it may be the ideal time to build long-term positions.
The predominant sentiment about the cryptocurrency market continues to be fear. However, Ethereum (ETH) has been highly affected, showing signs of capitulation on the Ethereum Network and a massive loss of net capital.
According to Glassnode data shared by Ali Martinez on X, Ethereum lost $13 billion in net capital “in the last few days.”
Interpreting the data
“This chart shows the 30-day Net Position Change of the largest and most dominant assets in the digital asset industry.
Net capital inflows can occur either through increases in Realized Cap of major assets BTC, ETH or through growth in stablecoin supplies considering USDT, USDC and BUSD.
The realized cap is used for the main assets in the network as it is a more accurate representation of the true flow of capital in/out of the market.
The Realized Cap values each coin at the last traded price, thus taking into account the relative liquidity of the coin and filtering out purely speculative operations that occur off-chain.”Glassnode (chart description)
Fear and capitulation on Ethereum
On the other hand, this is just another indicator of a massive capitulation event taking place among ETH investors. In recent days, other signals were also observed, such as the ‘historic anomaly’ of Daily Active Addresses (DAA) reaching an 8-year high of over a million DAA in a single day.
Additionally, more data from Glassnode shows that Ethereum is hitting monthly lows in the number of addresses receiving ether from centralized exchanges. This means that investors are not withdrawing as much as before, which could also indicate that there are fewer people buying ETH.
Looking at the relationship between long and short positions being formed in ETH derivative pairs, data obtained from Coinglass shows dominance of short positions since September 10 on the 4-hour chart.
However, in this context, the general sentiment of different fear and greed indices points towards a bearish sentiment of fear towards cryptocurrencies. Despite this, an old mantra of trading analysts suggests that these are generally the best times to start building and holding long-term positions.
