Ethereum HODLers Unite to Defend ETH against Dropping to $3,169
After experiencing a significant decline from its post-election gains, Ethereum [ETH] is currently engaged in a tense battle. The absence of any major breakout in Bitcoin’s performance has led investors to adopt a cautious approach. Given the current situation, the question arises – should one proceed with care or seize the opportunity?
Shifting Momentum…
In the past, Bitcoin’s [BTC] stability often signaled the onset of an altcoin season. However, this time around, altcoins are struggling to make headway, with 70% of the top 10 cryptocurrencies (excluding stablecoins) facing substantial losses within a week.
Ethereum has also not been spared from the downward trend, witnessing a 12% decline in a week, partly attributed to robust U.S. economic indicators. The ETH/BTC pair is experiencing daily lows, suggesting that ETH’s recovery is dependent on an overall market upturn.
Moreover, the situation is exacerbated by whales offloading 10,070 ETH at $3,280, incurring a $1 million loss. Consequently, ETH’s value currently stands at $3,227, reflecting a 1.15% decrease. Nevertheless, the stakes have never been higher.
If the trend of capitulation persists, ETH could potentially drop to $3,169. At this price level, 5.46 million wallets, possessing 5.61 million ETH, were accumulated. The next moves made by these HODLers will significantly impact ETH’s trajectory. It presents a high-risk scenario – hold onto assets until the market recovers, or opt to cash out before another downturn occurs.
Will Ethereum Whales Embrace the Risk?
The decision rests on a combination of psychological factors and empirical data. From a statistical perspective, ETH continues to trade 33% higher than its levels post-election, a level that has historically acted as robust support.
In addition, the futures market is witnessing a surge in activity, with derivative trading volume rising by 105% and Open Interest (OI) increasing by 2%.
Nevertheless, other elements are in motion – investors are speculating on a repeat of the Q4 cycle, anticipating another ‘Trump pump.’ The psychological momentum is evident, but will it be adequate? According to CryptoCrypto, a definitive ‘Yes’ remains elusive.
What’s causing the uncertainty? Major stakeholders are displaying signs of waning confidence, potentially diminishing the Fear of Missing Out (FOMO) that currently fuels market optimism. Both retail and institutional investors are yet to fully re-enter the market, with apprehension prevailing.
Despite the previous Trump rally that propelled Ethereum to $4K, achieving a similar outcome on this occasion seems increasingly improbable. Even with the potential ‘Trump pump,’ it might not suffice to trigger a substantial recovery for Ethereum.
In essence, exercising caution at this juncture is paramount. Ethereum’s resurgence is intricately linked to the wider market recovery. While the excitement surrounding the prospect of a ‘Trump pump’ is enticing, it’s imperative not to be swayed solely by the prevailing “hype.”