Ethereum’s cryptocurrency, Ether (ETH), has not performed as well as Bitcoin (BTC) in the current cycle, which puts new holders at risk of incurring losses. Glassnode, an analytics firm, highlighted the role of speculators in supporting the price of ETH in its recent newsletter, “The Week On-Chain,” published on May 7. Both Bitcoin and Ether have experienced downward price movements since Bitcoin’s block subsidy halving in April. However, Ethereum has been hit particularly hard in the past few weeks, with one of the largest drawdowns since the FTX debacle in late 2022. Despite this, Ethereum has shown some resilience during pullbacks, leading to a decrease in volatility across the digital asset space. While the extent of price drawdowns for ETH is decreasing, certain investor groups now face potential losses on their holdings. Short-term holders (STHs), who have held their coins for 155 days or less, have an aggregate cost basis of around $3,000. Ethereum’s price currently hovers around that level, with any dips quickly being bought up. Glassnode analyzed Ethereum’s market value to realized value (MVRV) metric and suggested that a market drop could cause panic among STHs who bought at recent prices. The MVRV metric measures unrealized profit and loss for STHs at a given price. Glassnode also noted that long-term holders (LTHs) seem to be unwilling to sell their holdings at current prices, despite already having significant profits. The market is currently waiting for signals from US regulators regarding the fate of spot Ether exchange-traded funds (ETFs). This article does not provide investment advice, and readers are encouraged to conduct their own research before making any investment decisions.
Ethereum's Price Clings to $3K Support Amidst Speculatory Divergence