The second major cryptocurrency Ethereum reached a half-year high on Thursday. However, it was pushed back quickly, now exchanging hands at the $1,657 level.
Santiment on-chain data aggregator has suggested a reason why it happened.
Lack of trust from traders pushed Ethereum down
Per a recent tweet published by the above-mentioned platform, Ethereum reached a level that high for the first time since mid-September. The likely reason for the price surge was expectations of the Non-Farm Payrolls report that, in January, 185,000 jobs were added, versus 223,000 jobs in December.
However, as February began, traders began to lock in their profits, selling ETH and withdrawing funds.
Santiment stated that February saw the biggest ratio of profit transfers since the same month in 2021.
"Traders do not believe this climb will continue," the tweet said.
🥳 BREAKING: #Ethereum has just officially surpassed $1,700 for the first time since September 12th. Since the start of February, $ETH is seeing the highest ratio of profit transactionsin 2 years. Traders apparently don't believe this climb will continue. https://t.co/YuakCJP7ZW pic.twitter.com/fPcYApulNv— Santiment (@santimentfeed) February 2, 2023
However, there is good news too: the supply of Ethereum on exchanges at the moment is the lowest since June 2018. This means that traders still prefer self-custody for their crypto rather than hot wallets on exchanges, Santiment explained in a comment to its tweet.