Ethereum (ETH) investors are likely to experience heightened volatility in the coming days as the second largest cryptocurrency has witnessed a surge in ETH deposit activity. According to Santiment, an on-chain data aggregator, ETH deposits to exchanges have hit an eight-month peak. This could possibly foreshadow increased price volatility for the crypto asset similar to the impact experienced in the past around significant events such as the Merge upgrade and the collapse of FTX.

As observed by Santiment, exchanges have taken in nearly 9,200 unique ETH deposits, the highest amount since the time of Merge implementation. Twitter user @misterrcrypto further noted that ETH has been burned in large quantities due to the meme coin season when people are actively burning coins in billions to build these meme cryptos on Ethereum blockchain. Since the Merge, 153,265.34 ETH has been destroyed as a consequence of increased network activity.

At the time of writing this article, Ethereum is trading at $1,898 after hitting a recent high of $1,930 on April 30. On Nov. 5, when FTX crashed, Ethereum plummeted from $1,627 to $1,100 in a span of few days. The mechanism introduced in 2021 with the London hard fork has allowed the developers to burn ETH, thus limiting the circulating supply of the coin to make it scarce. This, in turn, can potentially result in an increase in ETH's price.

All-in-all, ETH deposit activity reaching an eight-month peak could be indicative of the fact that the crypto asset might be experiencing an increased volatility in the near future. However, whether it will be driven by long-term institutional investments or short-term speculation associated with a meme coin season cannot be ascertained as of yet.



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