• ETH traders have been exiting the market in large numbers following a recent rally in the price of Ethereum.
• On-chain analysis of the Net Taker Volume metric reveals that traders are fleeing the market via market orders.
• Market demand has weakened and Open Interest has fallen, leading to a 6% decline in ETH’s price over the last week.

ETH Traders Fleeing Market Following Price Rally

ETH traders have taken to distributing their holdings as many anticipate the Shanghai Upgrade. On-chain assessment of the Net Taker Volume metric has revealed that following the recent rally in the price of Ethereum [ETH], traders have been exiting the market in large numbers, with the highest volume of exits seen since the collapse of Terra-Luna.

Net Taker Volume Reveals Aggressiveness Of Sellers & Buyers

According to CryptoQuant analyst Maartunn, this metric tracks the aggressiveness of both buyers and sellers for a specified crypto asset by calculating the difference between ‚Taker Buy Volume‘ and ‚Taker Sell Volume‘. These are market participants who use market orders, willing to buy or sell at any cost but prioritize exiting their position quickly. With ETH’s Net Taker Volume at its deepest negative value since May 2022, „traders on Ethereum are escaping the market through market orders, which is pushing prices down,“ Maartuun noted.

Market Demand Weakens & Open Interest Falls

Data from Santiment shows that after ETH crossed $1600, new demand for it weakened drastically with daily addresses created falling by 88%. Additionally, per data from Coinglass during that period, ETH’s Open Interest fell by 5%, indicating a shortage of investor attraction and potentially resulting in a drop in price.

Hedging Against Impending Price Drawdown

Maartunn advised: „The strongest signal of this indicator is when prices are still relatively high yet Net Taker Volume is deeply red – which is where Ethereum currently stands. This doesn’t mean that Ethereum can’t bounce back short term but as long as Net Taker Volume shows negative values it’s better to sell than buy.“

Shanghai Upgrade Might Work Wonders

Despite this current situation many investors maintain a positive outlook due to anticipation surrounding The Shanghai Upgrade which could potentially pump liquidity into markets again and bring about an increase in investor confidence.