Long-term holders seem reluctant to engage in large sales at the current ETH price, despite having already achieved significant profit margins.
Ethereum (ETH), the world’s second-largest cryptocurrency, is facing continued selling pressure as its price remains just above the $3,000 support line. Compared to Bitcoin, Ethereum once again “underperformed” as new ETH holders faced the risk of losing money.
Glassnode, a cryptocurrency analytics platform, recently revealed how ETH speculators are keeping the altcoin price close to $3,000. Bitcoin and Ethereum prices fell significantly in April, witnessing the largest monthly retracement since the FTX collapse in April 2022. Glassnode added:
“However, it is worth noting that Ethereum’s deepest cycle decline was -44%, which is more than twice as severe as Bitcoin’s -21%. This highlights Ethereum’s relative underperformance over the past two years, which is also reflected in the weaker ETH/BTC ratio.”
- Provided by: Glassnode
As the severity of the Ethereum (ETH) price decline diminishes, some groups of investors are now at risk of losing their holdings. The total cost basis for a short-term holder of Ethereum (STH), defined as an entity holding a coin for 155 days or less, is currently around $3,000.
Citing Ethereum’s different market capitalization to real estate value (MVRV) metric, Glassnode said a fresh market decline could cause further panic among holders. Glassnode warned:
“Ethereum’s STH-MVRV is currently trading at a very slight premium, which could mean the spot price is very close to cost basis for recent buyers, and buyers could panic if the market experiences downside volatility. .”
Meanwhile, long-term holders (LTHs) seem reluctant to sell in bulk at current prices, despite having already achieved significant profit margins.
Ethereum is becoming inflationary again due to Dencun upgrade.
Cryptocurrency analytics firm CryptoQuant said the Dencun upgrade has caused Ethereum (ETH) to become inflationary once again, losing its characteristics as a “super-sound” currency. In a report earlier this week, CryptoQuant said that while Ethereum transaction fees are falling following the Dencun upgrade, total ETH consumed has fallen to its lowest level since the September 2022 Merge event.
Therefore, since the Merge event, ETH supply has been growing at the fastest daily rate. CryptoQuant analyst said: “Prior to the Dencun upgrade, the higher the network activity on Ethereum, the higher the fee consumption and thus the lower Ether supply. However, after the Dencun upgrade, the total fee amount burned was decoupled from network activity.”
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