Ethereum drops below $1,700, signaled in advance by a metric.

Over the past day, Ethereum’s value has dropped below $1,700. An on-chain indicator called Ethereum Age Consumed Metric may have signaled this dip in advance.

Ethereum Age Consumed Metric Saw A Spike Before The Price Decline

On-chain analytics firm Santiment has reported that institutional investors were expecting this move to take place. The “ETH age consumed” indicator is of interest here. It finds the total number of coins moving on the Ethereum blockchain and multiplies this value by the days these coins had been dormant before their movement.

This metric tracks how many coins are being sold/moved each day and uses their age as a weighting factor. A high value of the metric means that many old coins are moved to the network, while low values imply that there aren’t many coins moving on the chain or some coins with a low average age are being transferred.

A chart shows the trend in the Ethereum age consumed over the past month:

The value of the metric has been quite high in recent days | Source: Santiment on Twitter

The graph shows a recent large spike in the Ethereum age consumed metric, indicating the potential movement of many dormant coins on the chain during this surge. Large spikes in the indicator are usually a sign of selling from long-term holders (LTHs), who are experienced investors holding onto their coins since more than 155 days ago.

When LTHs sell, it’s usually not a positive sign for the price. The LTHs had also shown a large move earlier in the month, and shortly after that, the cryptocurrency price plunged. This time, the spike in the Ethereum age consumed also seems to have preceded a price decline, as the cryptocurrency’s value has now dropped below the $1,700 level.

This latest price plunge has come after the US Federal Reserve announced that it isn’t raising interest rates this time, but more hikes would be coming later in the year to fight inflation.

Santiment suggests that the spike in the age consumed metric before the price decline could imply that institutions already expected the move, hence why they shifted their coins early.

ETH Price

Currently, Ethereum is trading around $1,600, down 11% in the last week.

ETH has taken a plunge recently | Source: ETHUSD on TradingView

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