Ethereum’s cryptocurrency, Ether (ETH), has not performed as well as Bitcoin (BTC) in this cycle, and new investors now face the risk of losses. In their latest newsletter, “The Week On-Chain,” analytics firm Glassnode revealed the role of speculators in supporting the price of ETH.
Both Bitcoin and Ether have experienced downward price movements since Bitcoin’s block subsidy halving in April. However, for Ether bulls, the past few weeks have been particularly challenging after BTC/USD experienced one of its largest declines since the FTX debacle in late 2022.
Glassnode noted that Ethereum has shown a similar decline pattern, but with shallower corrections compared to Bitcoin. This suggests a certain level of resilience during pullbacks and a decrease in volatility across the digital asset space.
Although the extent of ETH price declines is decreasing, certain investor groups now face the risk of falling into losses. Short-term holders of Ether, who have held their coins for 155 days or less, have an aggregate cost basis of around $3,000. ETH/USD is currently trading around that level, with a brief dip below it last week that was quickly bought up.
Glassnode analyzed Ethereum’s market value to realized value (MVRV) metric and suggested that a further market drop could lead to panic among short-term holders. MVRV measures unrealized profit and loss for these holders at a given price.
Summarizing the situation, Glassnode acknowledged that the market is eagerly awaiting signals from US regulators regarding the fate of spot Ether exchange-traded funds (ETFs). Meanwhile, long-term holders appear reluctant to sell their holdings in large quantities at current prices, despite already having significant profit margins.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.