The year 2022 has not been very profitable for Ethereum holders. The token is 36.62% up from its cycle low at $897.06. However, it has seen its price value erode over the last eight months.
I lose it
The second-largest cryptocurrency was up 7% as it traded above the $1,200 mark, at press time. While this may provide some relief, the overall storyline painted a completely different picture. Ethereum peaked -79.5% lower from its all-time high (ATH), putting this selloff at the upper boundary of previous bear market lows.
A sell-off that even degraded ETH’s dominance as compared to BTC, the king coin. Consider the graph below. The plot highlights the aggregate state of general risk-off sentiment in the market, where ETH under-performs BTC, and both tend to under-perform the U.S. dollar.
This, according to Glassnode, raised some concerns because,
“The dominance of BTC commands the gravity of capital flows, which historically signaled further underperformance of ETH over the following months.”
In addition to this, the MVRV for both ETH and ETH 2.0 experienced significant drawdowns.
It reached negative deviations well below breakeven, currently signaling that the market holds an overall unrealized loss of -33%. The current MVRV cycle low is 0.60, with only 277 days in history registering a lower value, equivalent to 11% of trading history.
Similarly, the MVRV ratio for ETH 2.0 deposits can also be calculated based on the price-stamp when the deposits were made. The average price per staked ETH is $2.4k, which is more than twice the current spot price.
This puts ETH 2.0 players at a total of -55% unrealized loss. This is a performance of -22% lower than that of the average ETH investor.
The wall of worry
Surely, these metrics added to the rising fear amongst the holders who might be running out of patience. As per the analytical platform, Santiment, there is a ‘Wall of Worry’ forming despite ETH displaying a surge.
This tweet represented the behavior of different groups of ETH holders, from retail to whales. Obviously, all kinds of ETH holders have lost patience.
Nonetheless, regardless of the dominating bear markets in the past, ETH recovered well. Now, with the Merge coming close, ETH’s move up the chart can’t be ruled out.
