Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, is grappling with a lack of momentum as investor sentiment plunges to a yearly low. Despite the pessimism, some view this situation as a potential springboard for a bounce back.
ETH’s performance has been underwhelming compared to other leading digital assets, with prices lingering around the $2,300 mark.
Social media chatter regarding Ethereum, as reported by market intelligence firm Santiment, has reached its most negative point in a year. This downturn follows a gradual wane in enthusiasm, with investors turning increasingly bearish since September 2024.
Nevertheless, Santiment’s analysts hint that despite the cloud of negativity, a potential contrarian buying opportunity could be on the horizon. The data suggests that periods of intense bearish sentiment have traditionally been followed by price recoveries, especially when the market regains stability.
Further fueling investor anxiety is the falling unrealized profit among Ethereum ‘whales’ (those holding at least 100,000 ETH). Recent analysis from CryptoQuant shows that whale profits have regressed to bear market levels, even though Ethereum’s value has doubled since the last crypto winter. Despite previous network upgrades like Dencun enhancing its scalability and efficiency, Ethereum’s challenges persist.
Ethereum’s woes are also linked to broader market trends, with macroeconomic uncertainties and regulatory pressures identified as contributors to its poor performance. Moreover, the ETH/BTC ratio has fallen to a five-year low of 0.0246, implying that Bitcoin is attracting more investor attention than Ethereum.
At present, ETH trades at $2,300, reflecting a 3% increase in the last 24 hours but a 3.6% drop over the past week. Ethereum’s performance is disappointing compared to the wider crypto market, which has seen a 7.4% rise in the last week.
Looking at longer timeframes, the decline is more concerning. CoinGecko data reveals that the token is down 16.4% in the past two weeks. It has also lost as much as 40% of its value over the last year. Recently, ETH sank to a 16-month low after a market-wide slump that led to nearly $600 million in liquidation losses, with Ethereum bearing the brunt of the downturn. Some experts have even speculated that its price could drop below $1,200, a level not seen since late 2022.
