Ethereum before a big jump in price?

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The year 2019 didn’t go alright for Ethereum and its share price: the second-largest crypto currency by market capitalisation had to shut the past year with a performance of -12%, while Bitcoin (BTC) gained an honest 90% over an equivalent period. This year, however, ETH seems to possess reached the turning point.

According to the newest data from the analysis company Santiment, there seems to be a replacement all-time high for miners. They now hoard a substantial sum of just about 1.7 million ETH. So from the miners’ perspective, there’s currently no incentive to sell – are we watching an extra jump within the Ethereum share price?

 

Ethereum course: trend reversal achieved in January?

Ethereum remains running on a proof-of-work consensus mechanism. during this sense, the necessity for an economic incentive still applies to Ethereum Mining. In short, anyone who mines ETH under adequate conditions should make a profit by earning money at ETH; at the very least, however, they ought to cover their own costs.

With an appropriate rate, miners therefore regularly sell the mined coins so as to understand profits. However, if the present price is just too low or the expectations for the longer term are positive (= one assumes rising prices), the quantity of coins held increases.

A glance at the subsequent chart shows this quite clearly. those that didn’t have any selling pressure towards the top of last year at an Ethereum price of around 130 dollars, but were ready to ‘sit out’ positive expectations for the longer term and therefore the situation, were ready to get far more out of their ETH. as compared to the rate of exchange of 130 US dollars, the present Ethereum price of 190 US dollars could still generate 50% more profits in dollars.

 

Ethereum price

 

Ethereum Miner: 1.7 million ETH within the pockets

According to the newest data from Santiment (see source), the Ethereum Miners are hoarding an enormous amount of ETH immediately . the present number of ETH hoarded is nearly 1.7 million. This corresponds to a worth of 361,000,000 US dollars today. How can we interpret these figures?

First of all, we note that the amount of ETH ‘put aside’ has been increasing continuously in recent months. the primary interpretation here would be that the Ethereum Miners see a positive future and assume that share prices will rise.

The founding father of Santiment, the corporate from which the newest data originate, commented on this as follows:

 

“ETH’s continued accumulation shows a replacement level of confidence among the miners. this is applicable to the longer term and in reference to the present market situation.”

 

Positive expectations for the longer term

What does Maksim Balashevich want to inform us? – The insight is that the following:

  1. things in recent weeks and months has not been good for the miners thanks to the sharp drop by prices.
  2. the miners assess the longer term situation better than this situation. However, this doesn’t mean that the Ethereum course must reach ‘new heights’ within the future, but rather
  3. that from the Miner’s point of view, the Ethereum price of the previous month/end of December represented a bottom. The recovery phase has now begun.

Since the Ethereum course reached its annual high of over 300 dollars last July 2019, the miners are accumulating ETH again. With the present value we are almost at the all-time high of hoarded ETH, which was reached last year in October. in sight of the high volatility and therefore the price jumps of the last weeks, it’s likely that the miners will still accumulate Ethereum for weeks and months to return.

 

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