ethereum (eth) has underperformed this cycle, lagging well behind bitcoin's impressive rally to new all-time highs. While bitcoin grabs headlines with its continued rise, eth struggles to regain its yearly highs, leaving many investors questioning 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 enduring unrealized losses, reminiscent of the eth bottom of early 2020 before its explosive bull run. This suggests that current market conditions could offer a unique opportunity for long-term eth investors.
Ju's analysis highlights that, historically, these phases of unrealized losses have followed substantial price recoveries. If ethereum starts to gain momentum and closes the gap with bitcoin, the potential gains could be huge. For investors, this could mark the beginning of an uptrend, rewarding those who are patient during this period of consolidation.
With the shift in market sentiment and historical data supporting a bullish case, eth's next move could be pivotal. Investors and analysts are watching eth price action closely, waiting for signs of a breakout that could reignite its momentum and generate significant returns.
Last chance to buy ethereum?
Despite ethereum's disappointing performance this cycle, there are signs of bullish price action in recent weeks. eth has remained relatively stagnant compared to bitcoin's meteoric rise. However, bullish signs suggest that this could be the last opportunity to accumulate eth at discounted prices before it begins its climb towards new highs.
<a target="_blank" href="https://x.com/ki_young_ju/status/1859103362677141651/photo/1″ target=”_blank” rel=”noopener nofollow”>Critical Data from CryptoQuant CEO Ki Young Ju sheds light on an interesting development: eth–btc NUPL (net unrealized gains/losses) has hit a 4-year low. This indicates that despite ethereum's slow performance against bitcoin, many eth holders are enduring unrealized losses.
This reflects ethereum's bottom line in early 2020, just before its explosive rally began. Ju believes this period of underperformance could present an opportunity for long-term eth investors as it could set the stage for a potential rally.
However, Ju also notes that ethereum's future depends heavily on the revenue generated by Web3 applications, particularly through stablecoins. While the ecosystem remains promising, it also feels highly leveraged, and the issue of sustainable growth through revenue from Web3 applications does not seem likely to be resolved anytime soon.
Over a one-year period, Ju sees eth as less attractive than btc, although regulatory clarity in the future could change the dynamic and improve ethereum's appeal. For now, this period of consolidation presents a critical time for eth believers to position themselves for any significant price movement.
Crucial eth Proof 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 of $3,446. This consolidation suggests that eth is preparing for a possible breakout, especially with its recent rise above the key 200-day moving average at $2,957. Staying above this key support level is critical 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 the local high of $3,446. A successful break above this level could pave the way for eth to challenge its yearly highs, potentially reaching the $4,000 mark.
The current price action indicates a solid demand base above $3,000, and if eth can sustain this level, it could trigger a bullish surge. However, failure to hold above the 200-day moving average could retest lower support levels such as $2,900 or even $2,500.
For now, eth remains primed for a potential bullish move, and traders are closely watching for confirmation of a breakout to new highs.
Featured image of Dall-E, TradingView chart
