The crypto market has seen a shift in general sentiment since 9 August. This is being credited to the release of United States CPI news which will be panned out later on 10 August.
There are expectations among analysts that inflation has already peaked in June with the cooling of gas prices and supply-chain issues. A survey from the New York Federal Reserve this week signaled a positive sentiment among consumers since June.
According to CNBC, consumers expected inflation to run at a 6.2% pace over the next year and a 3.2% annual rate for the next three years.
That is a big decline from the respective 6.8% and 3.6% results in the June survey.
Time to back down?
In the mix of it all is the altcoin heavyweight, Ethereum which saw its price fall by 5.13% since 9 August. ETH prices, at press time stood at $1,687 after breaking the $1,700 mark according to CoinMarketCap.
There is a growing consensus in the market that the drastic shift in sentiment is expected to turn around soon.
That being said, according to Glassnode, open interest in perpetual futures contracts has reached a new low on Kraken.
It basically reached a 19-month low of $12.09 million on 10 August with the previous low observed on 7 August.
A declining interest in futures contracts can mean short-term bettors are not optimistic about the general market conditions.
However, they usually tend to change their actions quickly in tandem with the general sentiment.
Source: Glassnode
Rising from beneath
However, there are other indicators that suggest growing optimism in the Ethereum community. A recent update claimed that the number of exchange withdrawals (7d MA) has reached an 18-month low of 1,810.2.
Pulling out holdings from exchanges is usually seen as a bullish notice for assets.
Source: Glassnode
Additionally, the latest CoinShares report found that institutions have accumulated ETH-based funds for seven weeks straight.
The major reason for this interest is attributed to the Merge, scheduled for September.
Asset manager Grayscale has also announced that it could soon initiate staking for investors. However, the major obstruction is the risks that are associated with staking-related rewards.
We do not currently stake assets in any of our investment vehicles.
However, our team has been working diligently to identify solutions that could allow our investors to get exposure to staking-related rewards while mitigating risks. (2)
— Grayscale (@Grayscale) August 9, 2022
Well, the anticipation of inflation news may have knocked down the short-term sentiment of Ethereum investors.
But there is still Merge to look forward to since it promises greater revenue for the investors.