Ethereum (ETH) has underperformed during this cycle, lagging far behind Bitcoin’s impressive rally to new all-time highs. While Bitcoin makes headlines with its continued rise, ETH has struggled to regain its yearly highs, leaving many investors wondering about its next move.
Despite the lackluster price action, data from CryptoQuant CEO Ki Young Ju reveals a silver lining for ETH holders. According to Ju, many ETH investors are experiencing unrealized losses, reminiscent of ETH’s low in early 2020, before its explosive rise. This suggests that current market conditions could provide a unique opportunity for long-term ETH investors.
Ju’s analysis highlights that substantial price recoveries have historically followed such phases of unrealized losses. If Ethereum starts to gain momentum and close the gap with Bitcoin, the potential gains could be enormous. For investors, this could mark the start of an upward trend, rewarding those who remain patient during this period of consolidation.
With changing market sentiment and historical data supporting a bullish scenario, ETH’s next move could be crucial. Investors and analysts are closely monitoring ETH price action, hoping for signs of a breakout that could reignite its momentum and generate significant returns.
Last chance to buy Ethereum?
Despite Ethereum’s disappointing performance during this cycle, signs of bullish price action have been seen in recent weeks. ETH has remained relatively stagnant compared to Bitcoin’s meteoric rise. However, optimistic signals suggest that this could be the last opportunity to accumulate ETH at discounted prices before beginning its ascent to new highs.
Critical data from CryptoQuant CEO Ki Young Ju highlights an interesting development: ETH-BTC NUPL (Net Unrealized Profit/Loss) has reached a 4-year low. This indicates that despite Ethereum’s disappointing performance compared to Bitcoin, many ETH holders are experiencing unrealized losses.
This reflects Ethereum’s low situation in early 2020, just before its explosive rally began. Ju believes that this period of underperformance could present an opportunity for long-term ETH investors, as it could pave the way for possible upside.
However, Ju also notes that the future of Ethereum is heavily dependent on revenue generated by Web3 applications, particularly through stablecoins. While the ecosystem remains promising, it also appears heavily leveraged, and the question of sustainable growth through Web3 app revenue doesn’t seem likely to be resolved anytime soon.
Over a one-year period, Ju finds ETH less attractive than BTC, although regulatory clarity in the future could change the dynamic and strengthen Ethereum’s appeal. For now, this consolidation period represents a critical time for ETH believers to position themselves ahead of any significant price movement.
ETH Tests Crucial Demand
Ethereum is testing crucial demand above the $3,000 level, trading at $3,120 after several days of sideways consolidation below its local high at $3,446. This consolidation suggests that ETH is preparing for a potential breakout, especially with its recent rise above the key 200-day moving average at $2,957. Staying above this key support level is essential to maintain bullish momentum.
If Ethereum stays above the 200-day moving average and continues its upward trajectory, the next major resistance area will be the local high at $3,446. A successful breakout above this level could allow ETH to challenge its yearly highs, potentially reaching the $4,000 mark.
Current price action indicates a solid demand base above $3,000, and if ETH manages to maintain this level, it could trigger a bullish surge. However, if the price fails to hold above the 200-day moving average, it may be necessary to retest lower support levels, such as $2,900 or even $2,500.
For now, ETH remains primed for a possible rise, and traders are closely watching for confirmation of a breakout to new highs.
Featured image of Dall-E, chart by TradingView
