Price Preview: August 24 - August 30
Price falls below $400 as ETH leveraged in DeFi reaches new highs.
Hello Ethereans!
One of the most under-appreciated price signals for Ethereum is the amount of ETH leveraged in decentralized finance (DeFi) and how it relates to the price of ETH.
Last week we saw ETH fall from a high of $448.20 to a low of $379.28 while, counter-intuitively, the amount of ETH leveraged in DeFi continued to new highs (currently 4.20% of all circulating ETH). I’ve long speculated that the relationship between these two metrics is a powerful leading indicator for the price of ETH and the last few weeks have demonstrated this well.
Ignoring the clear correlation between leveraged ETH (a reflection of market sentiment) and the price of ETH, the more pertinent trend came in the last few days when the price of ETH fell over 10% from its high.
During this period, sophisticated investors (those using DeFi to leverage their ETH position) continued locking up ETH by the thousand, signalling their expectation that the price drop was temporary or nearing a local bottom and that it would soon reverse upwards.
This trend has also been seen several times in reverse. The chart is available here.
In this preview we look at:
ETH gas fees drop 80% to July levels.
Medalla testnet recovers and is expected to not delay the launch of Phase 0.
$1 billion USDT migrates from Tron to Ethereum.
In more general news, USPS eyes the blockchain to improve mail-in voting.
Media roundup for the week ahead.
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