A significant amount of Ethereum [ETH], totaling $1.46 billion, was illicitly withdrawn from a cold storage wallet during the recent Bybit hack. Despite the substantial outflows experienced by the exchange, the processing of these transactions has proceeded without major disruptions. As of the current moment, ETH has depreciated by 2.64% within the past 24 hours.
An observation made by crypto analyst RektProof highlights a discernible pattern outlined in a post on X. The consolidation range established during Q1 of 2024 appears to remain relevant, with recent events causing deviations below previous lows. This interval also coincided with a period of accumulation spanning from July to October 2024, which ultimately led to a rapid surge in November.
Analogies were drawn with Bitcoin [BTC] experiencing cyclical lows triggered by unforeseen incidents like the COVID pandemic or the FTX market crash. These comparisons suggest that Ethereum might be approaching similar cyclical lows. Nevertheless, skepticism persists regarding the feasibility of such a scenario.
Data Metrics Indicate Potential Further Decline for Ethereum
The exhaustion metric for sellers factors in the percentage of supply in profitable territories and the 30-day price volatility. Recent data has shown a surge in volatility alongside a decline in the percentage of supply operating at a profit.
This disparity has led to an increase in the exhaustion metric, typically signaling opportune moments for entering the market when a significant portion of supply is below profitability thresholds and prices are consolidating. Regrettably, the prevailing market conditions, particularly on extended timeframes, do not entirely align with these metrics.
The percentage of supply in profit has steadily decreased since the price encountered rejection around the $4,000 mark back in December.
Currently, this metric stands lower than at any point since October 2023, showcasing underperformance amidst Bitcoin’s ascent towards $100,000, causing consternation among Ethereum holders.
The net unrealized profit/loss (NUPL) for short-term holders (STH) considers transactions executed within the past 155 days. NUPL values below 0 indicate losses for STHs, with the current metric positioned at -0.164.
When aligning the identified range formation with these metrics, the conditions may appear favorable for considering ETH as a potential buy opportunity. However, the negative NUPL does not definitively signify local price bottoms.
Referencing the scenario from January 2022, whereby STH NUPL touched -0.018 before plummeting to -0.4 in February, the subsequent price consolidation around the $3,000 level culminated in Ethereum’s decline to $1,100 by June 2022, plunging the NUPL even further.
While this case represents an extreme scenario, it underscores the need for contextual analysis when interpreting metrics. By integrating price movements with the current metrics under scrutiny, indications point towards a potential descent in ETH’s price towards $2,100.