Key takeaways
Why is Ethereum showing resilience this quarter?
Short-term Ethereum holders remain in a high profit zone, and smart money is buying the dip, giving ETH a conviction-based advantage.
How does Bitcoin weakness affect Ethereum?
BTC’s growing risk of capitulation is turning into relative strength for ETH, positioning it as a safer asset amid broader market weakness.
Zooming out, Ethereum (ETH) is struggling more than Bitcoin (BTC) this month. With a 17.8% drop in November, ETH shows a -23% ROI in Q4 (almost 1.5x behind Bitcoin), repeating a Q1-like divergence.
Generally speaking, ETH HODLers are suffering heavier losses, with 40% of the supply currently underwater. But zooming tells a different story. On November 14, BTC fell to early May levels with a 5.6% decline.
Meanwhile, Ethereum remains nearly 73% above its base cost of $1,793 compared to May. Simply put, while BTC HODLers are showing signs of weakness, short-term ETH (STH) holders still have a healthy profit reserve.
Source: TradingView (ETH/USDT)
In a risk-free market, this divergence marks a key inflection point.
Compared to Bitcoin, Ethereum shows a stronger incentive to HODL, meaning its risk of capitulation is lower. In fact, a mere 0.25% change from ETH’s $3,160 spot price would return a key cohort to profitability.
As a reminder, 4.09% of the ETH supply has a realized price of $3,168. Recovering this level would put approximately 3 million ETH back in the money. In short, could STH’s belief in ETH become a key catalyst in this cycle?
Ethereum holds strong as Bitcoin capitulation looms
Bitcoin is showing clear signals of capitulation.
With a 5.2% decline to $94,000, BTC’s net realized profit/loss turned red, highlighting $1.3 billion in net losses (its largest realized value due to losses since April). Meanwhile, ETH managed to limit its losses to $325 million.
Simply put, Bitcoin is facing significantly higher selling pressure, while Ethereum remains relatively resilient, with STH (holding >155 days) retaining profits, giving ETH a conviction-based advantage.
Source: Glassnode
In short, the risk of BTC capitulation becomes the major advantage of ETH.
Plus, it’s not just an overview. Tom Lee is actively buying the “dip”. Arkham Intelligence recently reported a wallet withdrawing $29.7 million worth of ETH, consistent with previous acquisition patterns seen at Bitmine.
Overall, Ethereum’s Q4 tailwind has not yet turned bearish.
Given that ETH STH is in a “relatively” high profit zone and smart money is buying the dip, Ethereum could indeed position itself as a conviction-based safe haven amid broader Bitcoin weakness.
