Researchers at Santiment believe that a drop in stablecoin lockup yields will push up the Ethereum price.
During the cryptocurrency bear market that began in October, investments in dollar-pegged digital assets began to yield less income, apparently due to the growing number of locked coins. This is because many traders converted Bitcoin, Ethereum, and other volatile virtual currencies into stablecoins and locked them up to generate passive income while the downward trend persisted.
As a result of this process, the yield on stablecoins locked up on major platforms has fallen to 3,9-4,5%, and, according to Santiment expert Maxim, this serves as a positive signal.
The market’s health can be gauged by the yield on stablecoins locked in lending protocols. High yields reflect strong demand for loans, which often occurs during price peaks. Currently, the APY is around 4%. This suggests that the digital asset price hasn’t peaked and could rise further, according to Santiment’s report.
During the correction, the ETH price rose by 18% and briefly held above the $3,000 barrier. However, Maxim believes the upward movement will continue, so the Ethereum price will rise by 7% from its current value and reach $3,200 before the next bearish wave. However, given the risks, it makes sense to wait for the downtrend to end and buy coins at the local bottom rather than buying them now in hopes of a 7% price increase.
Ethereum price likely to rise