Analyst Andrew Kang of Mechanism Capital and PleasrDAO explains fundamental imbalance between ETH buyers and sellers at this market phase
Andrew Kang, co-founder and partner of heavyweight VC Mechanism Capital, outlines who is ready to buy and sell Ethereum (ETH) right now. It looks like this list could be alarming for Ethereum (ETH) bulls.
Buyers: Scalpers, who else?
According to Mr. Kang, by the end of May 2022, there is only one category of market participants interested in increasing the share of Ethereum (ETH) in their allocations.
Traders interested in short-term scalping opportunities are most likely to buy Ether when they hit round numbers or among “fading feelings,” Kang says.
All other categories of Ethereum (ETH) “believers” have already spent their “dip money” on the previous “1,000 dips.” As such, nobody is interested in seeking a “buy the dip” opportunity for a second cryptocurrency right now.
Sellers: institutions, retailers, minors
At the same time, the list of “sellers” is growing day by day. First, institutions are reducing their exposure to Ethereum (ETH) because it is not meeting their expectations. Additionally, some institutional players are in dire need of cash to cover their losses after the Terra (LUNA) drama and other major meltdowns in recent weeks.
Retail holders also need to sell their Ethereum (ETH) bags, as they are “bleeding in all directions.” The situation for many projects looks just the same: they need cash to cover their expenses.
“Short sellers” and miners are two other categories of sellers as Ethereum (ETH) fails to recover from the fall: on May 27, 2022, it hit the $1,600 level, or 60% below its November ATH.
Last but not least, people who were interested in selling before but were waiting for a “bounce” are losing their hope for Ethereum (ETH) recover, Mr. Kang adds.
