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Yes, this is usually done when core otel-collectors are run as agents in every node. Every application running in a node will send their trace and metrics data to the agent running in that machine (http://localhost:4317) and all the agents will have

otlp

exporter configured to forward the data to signoz's IP (say, a machine or cluster running signoz). Eg, core otel collector will have additional exporter config as

exporters:
      otlp:
        endpoint: "<IP of machine hosting SigNoz>:4317"
        insecure: true

This setup is working, verified on AWS.