Ethereum, the Layer 1 blockchain for most DeFi protocols available in the market, has seen a decline in both metrics and price since the beginning of the month.
according to coinmarketcapvalue of Ethereum It is down 6% on the weekly time frame and is trading at $1,554.
nansen.eOn the other hand, is noting several key metrics that investors should pay attention to as Ethereum’s Shanghai upgrade rolls closer to the frame.
During this, DeFi has been hit hard by the recent volatility in the market. DeFi’s Total Value Lock (TVL) is gone Below From one percent, a figure that may not be so alarming but may still bring some negative energy for investors.
Market down, investors dragged
according to recent Thread Created by the company, Ethereum is showing signs that both retail and institutional investors have a bearish attitude which is contributing to the overall market depression seen right now.
Source: CoinMarketCap
In the simplest explanation, traders are said to be more efficient at selling higher than buying lower. One category ‘dip buyers’ in the Nansen report counted only 23 traders who fit this category.
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Sellers are also disposing of more ETH on the open market. The Top Sellers segment of the report also shows that he sold over 335k ETH. Investors who experienced $40k gains are also avoiding ETH with a 50% drop in the metric. This can be attributed to external events that heavily impacted the markets, namely the Terra collapse.
In the short to medium term, it’s not looking too good for Ethereum either. coinglass statistics Shows that short sellers are outnumbering longs which is contributing to the overall marker decline as of press time.
Macro trouble teams up with the bears
recent Macroeconomic news is weighing on the broader market after US Federal Reserve Chairman Jerome Powell announced that the Fed could hike rates further in the coming months. came after February’s Year-over-year Consumer Price Index report that shows a decrease of only 0.1% in CPI from 6.5% to 6.4%.
Ahead of the CPI data release, analysts are upbeat, predicting a YoY CPI of 6.2%. This sent the financial markets off to start the day lower, dragging down the crypto market as well.
This all comes ahead of the release of Ethereum’s Shanghai upgrade. This could be bad news for ETH as it could be a repeat of the merge event for altcoins.
Crypto total market cap at $988 billion on the daily chart | Chart: TradingView.com
The merge was a publicized event where Ethereum moved from Proof-of-Work (PoW) to Proof-of-Stake (PoS), which was expected to bring some profit to investors. However, the market saw significant loss Which is overshadowed by the incident.
If the Shanghai upgrade follows in the merger’s footsteps, investors could face gains or losses depending on whether or not macroeconomic conditions improve.
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Credit : www.newsbtc.com