“With public sentiment, nothing can fail. Without it, nothing can succeed”
It seems that Abraham Lincoln summed up the emotions of the crypto market a long time ago. While the royal coin has garnered a lot of interest from investors lately, Ethereum seems complacent in this regard. Well, painful gas costs could be one of the reasons.
Undeniably, investors who bought the coin at an all-time high might be associating themselves now with Hester Prynne of The Scarlet Letter for their “affair” with Ethereum. While a percentage of ETH holders have walked off cutting losses, others continue to look at the price charts with hope and distress.
Just recently, LUNA overtook Ethereum in total staked value and that has, so to speak, added to the agony for investors.
Furthermore, expensive gas fees and slow transaction times on Ethereum have provided an opportunity for competitors to gain market share. In this regard, investment bank Morgan Stanley issued a report in January 2022, one noting that Ethereum’s dominant market share has greater chances to decrease over time. However, it’s interesting to note that bulls haven’t given up yet.
How? ‘Or’ What?
At the time of writing, ETH was up 0.80% in the past 24 hours. After the unprecedented sell-off on Feb. 24, ETH bulls exerted pressure to move up the price charts. The token reached a local high of $3024, however, it reversed its gains to touch the 1-week support of $2591. For the coin to reach $3,500, the bulls will need to break above the resistance at $3,024 and $3,205.
The probability of which looks bleak at the moment.
The hike after Feb 24 was due to lower volume. This certainly meant that no real profit could be expected unless the volume recovered. In fact, the RSI, at the time of writing, sits at 38, with no hope of moving north.
Well, all this goes to say that the current market structure for ETH doesn’t offer a profit-making opportunity. Curiously, it’s just half the truth. A few on-chain metrics reveal that investors clearly haven’t been rekt.
In fact, dreaming of a LAMBO with a huge percentage of ETH in your wallet might not be a heartbreaking experience a decade from now.
Well, looking at the chart, it can be seen that on 22 November 2020, there was a massive surge in long liquidations. Following the same, the price went down drastically.
Interestingly, after 2020, there were no major long-lasting liquidation events. However, February 22, 2021 and May 19, 2021 saw a spike in the long count of liquidations. Even so, they weren’t even half of what November 22, 2020 saw.
Investors at this point should note that post 19 May 2021, there hasn’t been any major rise in the long liquidations count. In fact, if we compare the long liquidations on 22 February 2022 with last year, it can be clearly seen that investors are up for some massive profit-making opportunities in the days to come.
Interestingly, short liquidations are not going down after December 2021. In fact, it has been witnessing a short spike. If it manages to break above its 29 May 2021 count, ETH might see a rally in the future.
HODLing in this case would not be a bad decision.
What you should and should not do?
Basically, the funding rate for ETH has been above zero for the most part of 2020 and 2021. It simply means that more investors are predicting a bullish move for the Ethereum market.
Therefore, exiting during the “dip” could disappoint investors going forward.
Well, the Open Interest saw an exponential increase post-December 2020. After reaching its high in November 2021, it dropped down by a significant margin.
Now, since the start of 2022, it hasn’t seen a massive surge. All of this means that market volatility so far has been nominal relative to the year 2021. This does not portend bullish or bearish movement. But, it reveals that the price of ETH could turn down to find strong support before recording another rally.
The prospects of ETH for the long-term market look bright. However, an area of concern remains its daily active addresses which haven’t seen a major increase.
Despite the buzz about the Ethereum network shifting to PoS, many investors don’t seem very interested in continuing their journey with Ethereum. In fact, many of them have moved on to rival Ethereum blockchains like Solana and Avalanche.
While the current market is giving an absolute bearish signal, it’s important to know that HODLing ETH might as well give a billion-dollar opportunity in the future.
