Ethereum, one of the top cryptocurrencies in the market, has been experiencing some interesting trends in recent times. Let’s take a closer look at what’s been happening with Ethereum and what it could mean for the future of the digital asset.
Whale capitulation played a significant role in Ethereum hitting a multi-year low near $1,400. This was evident in the sharp drawdowns in long-term holder balances and realized losses across large wallets. However, since that event, Ethereum has managed to stage a recovery of around 25%, currently trading at around $1,760. This recovery has been supported by dip-buying from large entities and a decrease in fear, uncertainty, and doubt (FUD) in the market.
The key question now is whether this recovery is just a temporary breakeven point or if Ethereum is establishing a solid base for bullish momentum moving forward.
Ethereum is currently trading 12% below its realized price of $2,002, indicating that the average holder is at a net unrealized loss position. This typically signals a market correction or consolidation phase where long-term holders are being tested. Historically, when Ethereum has traded below its realized price, it has struggled to maintain upward momentum, often remaining sideways or slightly bearish.
On the flip side, there is a bullish pattern emerging in Ethereum’s on-chain activity. Data from CryptoQuant shows a surge in inflows to wallets that have never sold Ethereum and are focused on accumulation. In the last 48 hours, over 640,000 ETH has flowed into these addresses, marking the largest inflow since 2018. This suggests that there are silent accumulators in the market who are potentially signaling something that the broader market has yet to fully grasp.
Despite the undervaluation of Ethereum’s price, this accumulation phase has led to a 15% rebound, establishing a bullish range for the digital asset. This could potentially set a supportive base for future upside movement.
Rather than a repeat of the 2018 capitulation event, Ethereum could be entering a consolidation phase for 2022-2023. During this phase, Ethereum’s price action may remain range-bound below $2,200 before potentially breaking through resistance levels in the first quarter of 2024.
In conclusion, Ethereum’s current position below its realized price and the influx of inflows to silent accumulators suggest a mixed outlook for the digital asset. While there are signs of potential bullish momentum building, Ethereum may still need to overcome key resistance levels to establish a more sustained upward trend in the future.
As always, the cryptocurrency market is highly volatile and unpredictable, so it’s essential to stay informed and monitor developments closely.