HomeEthereumSpeculators Holding Ethereum Price at $3,000, Stifling Potential Rally

Speculators Holding Ethereum Price at $3,000, Stifling Potential Rally

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Analysis of Ethereum (ETH) Price Trends and Holder Behavior

The world of cryptocurrency is abuzz with the latest developments surrounding Ethereum (ETH), the second-largest cryptocurrency in terms of market capitalization. Despite facing continuous selling pressure and hovering just above the $3,000 support level, long-term holders of Ethereum seem to be holding strong and are reluctant to engage in mass selling at present prices, even though many have already made significant profits.

According to crypto analytics platform Glassnode, Ethereum has been underperforming compared to Bitcoin, with new ETH holders facing the risk of falling into losses. The platform highlighted that Ethereum’s deepest drawdown of the cycle has been -44%, which is more than twice as severe as Bitcoin’s at -21%, indicating Ethereum’s relative underperformance over the past two years.

Glassnode also pointed out that short-term holders of Ethereum, defined as entities holding coins for 155 days or less, currently have an aggregate cost basis of approximately $3,000. The platform warned that a fresh market drop could create further panic among holders, as spot prices are very close to the cost basis of recent buyers.

On the other hand, long-term holders of Ethereum are showing resilience and are not rushing to sell their holdings despite the current price levels. Many long-term holders have already achieved considerable profit margins and are confident in the future potential of Ethereum.

In a separate development, crypto analytics firm CryptoQuant highlighted the impact of the Dencun upgrade on Ethereum, making it inflationary once again and affecting its characteristics as “ultra sound” money. The upgrade has led to a drop in Ethereum transaction fees and a decrease in the total ETH burned, resulting in the fastest daily growth rate in ETH supply since the Merge event of September 2022.

Overall, the Ethereum ecosystem is experiencing a mix of challenges and opportunities, with holders closely monitoring market dynamics and the impact of recent upgrades on the cryptocurrency’s supply and demand dynamics. As the crypto market continues to evolve, Ethereum holders are navigating through uncertain waters with a mix of caution and optimism.

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