As a seasoned crypto investor, I’ve seen my fair share of market ups and downs. And while Bitcoin (BTC) has been making headlines with its price action following the latest halving event, Ethereum (ETH) has underperformed compared to its older brother.
During this market cycle, Ethereum’s Ether (ETH) hasn’t performed as well as Bitcoin (BTC). Consequently, recent investors could find themselves incurring losses.
In their most recent newsletter, “The Week On-Chain,” published on May 7, Glassnode explained how speculators have been bolstering the price of Ethereum.
Ethereum speculators on the edge of “panic”
As an analyst, I’ve observed that both Bitcoin and Ether have experienced price decreases since Bitcoin underwent its most recent block reward halving in April.
If you’re a supporter of Ethereum but have felt disheartened lately, the recent significant drop in Bitcoin’s value against the US dollar may be to blame. This decline is among the most substantial since the FTX incident towards the end of 2022.
“Regarding Ethereum, we observe a comparable pattern of price declines, featuring less pronounced corrections since the FTX bottoms. This implies a certain strength in the face of market downturns and a noticeable decrease in volatility within the cryptocurrency sector as a whole,” Glassnode stated.
“However, it is worth noting that Ethereum’s deepest drawdown of the cycle has been -44%, which is just over twice as severe as Bitcoin’s at -21%. This highlights Ethereum’s relative under-performance over last 2 years, which is manifesting in a weaker ETH/BTC ratio also.”
As a researcher studying the Ethereum (ETH) market, I’ve observed that the magnitude of price drops has been lessening recently. However, this trend might result in some investors experiencing losses on their ETH investments if they haven’t yet broken even.
Entities holding Ethereum for 155 days or fewer currently have an average cost of around $3,000 per coin.
According to information from CryptoMoon Markets Pro and TradingView, the ETH/USD exchange rate has remained relatively stable, dipping slightly below its current level last week before being promptly rebounded.
Examining the Market Value to Realized Value (MVRV) ratio of Ethereum as proposed by Glassnode, a significant decline in the market value could trigger anxiety among large holders, as this metric indicates their unrealized gains or losses at a specific price level.
As a crypto investor, I’d interpret this as: The STH-MVRV ratio for Ethereum is currently showing only a slight difference between spot prices and the average buy price of recent investors. This could imply that the current market value isn’t much higher than what new buyers paid. If there’s any downward market movement, these investors might become anxious and sell, potentially leading to further price decreases.
No appetite for profittaking
As a crypto investor, I’ve been closely monitoring the developments surrounding the potential approval of spot Ethereum exchange-traded funds (ETFs) in the US market. Glassnode, a well-respected analytics firm in the crypto space, recently acknowledged that the uncertainty around this issue is keeping many investors on the sidelines, as we all eagerly await regulatory clarity.
Long-term investors, referred to as LTHs, seem unwilling to sell in large numbers at present prices, even though they have already made significant profits on their initial investments.
In analyzing the Spent Volume Profit for LTHs (Long-Term Holders), it is apparent that the group of Bitcoin owners, who have held their cryptocurrency between half a year and two years, significantly increased their selling activities during the All-Time High (ATH) market surge.
“From this lens, Ethereum’s Long-Term Holders once again appear to still be waiting for better profit-taking opportunities.”
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2024-05-10 13:32