Speculatory Divergence: Ethereum’s $3K Support Holding

The latest newsletter from analytics firm Glassnode reveals that Ethereum’s Ether (ETH) has been underperforming compared to Bitcoin (BTC) in this market cycle. Both Bitcoin and Ether have seen price declines after Bitcoin’s block subsidy halving in April. Ethereum has been hit harder in recent weeks, with one of its largest price drops since the FTX debacle in 2022. Glassnode notes that Ethereum has shown resilience during pullbacks, but its deepest drawdown has been twice as severe as Bitcoin’s. This relative underperformance is reflected in the weaker ETH/BTC ratio.

Investors who hold Ethereum for a short period, known as short-term holders (STHs), now face the possibility of falling into losses. These entities have an aggregate cost basis of $3,000, which is around the current trading price of ETH/USD. If the market drops further, there may be panic among these STHs as they see their profits diminish. Glassnode analyzes Ethereum’s market value to realized value (MVRV) metric, which measures unrealized profit and loss. The slight premium in Ethereum’s STH-MVRV suggests that recent buyers may panic if the market experiences downside volatility.

Glassnode also points out that the market is waiting for signals from US regulators regarding the fate of spot Ether exchange-traded funds (ETFs). Long-term holders (LTHs) of Ethereum seem unwilling to sell at current prices, even though many of them have already made healthy profits. The newsletter suggests that LTHs are waiting for better opportunities to take profits.

Ethereum has underperformed compared to Bitcoin in this market cycle, and new holders face the risk of falling into losses. Ethereum’s short-term holders may panic if the market continues to decline, while long-term holders are waiting for better profit-taking opportunities. The market is also waiting for regulatory signals regarding spot Ether ETFs.

Erminie Beller

Erminie Beller

6 thoughts on “Speculatory Divergence: Ethereum’s $3K Support Holding

  1. Short-term holders of Ethereum must be feeling a bit worried as the market drops. 😬

  2. Long-term holders are hesitating to sell, hoping for better profit opportunities. ⏳

  3. Let’s hope for positive regulatory signals that can bring stability to the market. 🙏

  4. Ethereum’s performance compared to Bitcoin highlights the volatility in the crypto market.

  5. The market is always evolving, and it’s exciting to see what the future holds for Ethereum.

Leave a Reply