Ethereum (ETH) has performed “poorly” compared to Bitcoin (BTC) this cycle,

Ethereum (ETH) has “underperformed” compared to Bitcoin (BTC) this cycle, and new holders now risk losses.

In the latest edition of its newsletter, “The Week On-Chain,” dated May 7, analytics firm Glassnode revealed the role of speculators in supporting ETH prices.

Ethereum Speculators on the Verge of “Panic”

Both Bitcoin and Ether saw bearish price action after the recent block support halving in April.

However, for Ethereum bulls, the last few weeks have taken a hit after BTC/USD saw one of the biggest drawdowns since the FTX debacle in late 2022.

“For Ethereum, we can see a similar pullback structure, with significantly shallower corrections since the FTX lows. “This results in a degree of flexibility during withdrawals, as well as a net reduction in volatility across the digital asset space,” Glassnode wrote.

“However, it is worth noting that the deepest drop in Ethereum during the session was -44%, which is slightly more than twice as severe as Bitcoin at -21%. This highlights Ethereum’s relatively poor performance over the past two years, which is evident in the declining Ethereum-to-Bitcoin ratio as well.

Illustration of drawdowns in an Ethereum bull market (screenshot). Source: Glassnode

While the volume of withdrawals from Ethereum prices is declining, some investor groups are now facing a dip in the red with respect to their holdings.

Ethereum short-term holders (STHs) – entities that hold coins for 155 days or less – have their total cost basis at $3,000.

ETH/USD continues to trade around this level, with a brief dip below it last week, and buying quickly took place, according to data from Cointelegraph Markets Pro and TradingView.

Ethereum (Eth) Has Performed “Poorly” Compared To Bitcoin (Btc) This Cycle,
ETH/USD 12-hour chart. Source: Trading View

By analyzing Ethereum’s market capitalization into a metric of realized value (MVRV), Glassnode suggested that a new market decline could spark panic among these entities. MVRV measures unrealized gains and losses, here for STHs, at a given price.

“Ethereum’s STH-MVRV is trading at a very slight premium at the moment, which may indicate that spot prices are very close to the cost basis for new buyers, who may panic if the market experiences downward volatility,” he warned.

Ethereum (Eth) Has Performed “Poorly” Compared To Bitcoin (Btc) This Cycle,
Ethereum STH achieved price chart (screenshot). Source: Glassnode

No appetite for profit

Summing up, Glassnode acknowledged that the market was waiting for signals from US regulators regarding the fate of Ethereum exchange-traded funds (ETFs).

Related: Bitcoin Could Soon Rise on Bullish Hammer Candle – Glassnode Executives

Meanwhile, long-term note holders, or LTHs, appear unwilling to sell en masse at current prices even though many of them have already achieved healthy profit margins.

“If we examine the amount of profit spent on LTHs, we can see that the group of BTC holders who held for between 6 months and 2 years increased their withdrawal of their investments during the ATH surge,” the newsletter continued.

“From this lens, it once again appears that long-term Ethereum holders are still waiting for better profit-taking opportunities.”

Ethereum (Eth) Has Performed “Poorly” Compared To Bitcoin (Btc) This Cycle,
Ethereum spent a large volume of profits to its holders for a period of 6 months to 3 years (screenshot). Source: Glassnode

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

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