Ethereum (ETH) has underperformed this cycle, lagging far behind Bitcoin’s impressive surge to fresh all-time highs. While Bitcoin is making headlines for its continued rise, ETH is struggling to regain its yearly highs, leaving many investors questioning its next move.
Despite the tender price action, data from CryptoQuant CEO Ki Youthful Ju reveals a silver lining for ETH holders. According to Ju, many ETH investors are facing unrealized losses, which is reminiscent of ETH’s bottom in early 2020, before the explosive bull run. This suggests that current market conditions may offer a unique opportunity for long-term ETH investors.
Ju’s analysis highlights that in the past, such phases of unrealized losses were followed by a significant price recovery. If Ethereum begins to gain momentum and close the gap on Bitcoin, the potential gains could be huge. For investors, this could signal the beginning of an upward trend, rewarding those who remain patient during this period of consolidation.
Given the changing market sentiment and historical data confirming the gains, ETH’s next move could be crucial. Investors and analysts are closely watching ETH’s price action, hoping for signs of a breakout that could reignite its momentum and deliver significant gains.
Last chance to buy Ethereum?
Despite Ethereum’s disappointing performance this cycle, there have been signs of bullish price action in recent weeks. ETH remains relatively unchanged compared to Bitcoin’s meteoric rise. However, hopeful signs suggest that this may be the last chance to accumulate ETH at depressed prices before it starts climbing towards fresh highs.
Critical data from CryptoQuant CEO Ki Youthful Ju sheds airy on an captivating phenomenon: the ETH-BTC NUPL (net unrealized gain/loss) rate has reached its lowest level in 4 years. This means that despite Ethereum’s underperformance relative to Bitcoin, many ETH holders face unrealized losses.
This reflects Ethereum’s early 2020 low, just before it began its explosive rally. Ju believes that this period of underperformance could present an opportunity for long-term investors in ETH as it could set the stage for potential growth.
However, Ju also notes that Ethereum’s future depends heavily on revenue generated by Web3 applications, particularly through stablecoins. While the ecosystem remains promising, it also appears to be highly exploited, and the issue of sustainable growth through Web3 app revenues is unlikely to be resolved anytime soon.
Over a one-year horizon, Ju believes ETH is less attractive than BTC, although regulatory clarity in the future could change the dynamics and boost Ethereum’s attractiveness. For now, this period of consolidation represents a critical moment for ETH believers to position themselves ahead of any significant price moves.
ETH Testing Key Demand
Ethereum is testing key demand above the $3,000 level, trading at $3,120 after several days of sideways consolidation below the local high of $3,446. This consolidation suggests that ETH is gearing up for a potential breakout, especially after its recent rally above the key 200-day moving average at $2,957. Staying above this key support level is crucial to maintaining bullish momentum.
If Ethereum holds above the 200-day moving average and continues its upward trajectory, the next major resistance zone will be a local high at $3,446. A successful break above this level could pave the way for ETH to break yearly highs, potentially reaching the $4,000 level.
Current price action indicates solid demand fundamentals above $3,000 and if ETH can sustain this level, it could trigger a bullish rally. However, failure to stay above the 200-day moving average could lead to a retest of lower support levels such as $2,900 or even $2,500.
For now, ETH remains poised for a potential move higher, with investors closely watching for confirmation of a breakout towards fresh highs.
Featured image from Dall-E, chart from TradingView
