Ethereum (ETH) is experiencing a significant price drop, increasing skepticism among its holders. Many are moving to sell their holdings to offset losses, as indicated by the recent surge in the network’s realized profit and loss metric. This metric reached its highest point in three months, signaling substantial profit-taking activities, reminiscent of the sales observed during the March rally. However, unlike the optimistic profit-taking of March, the current selling is driven by declining confidence in future profits.
Impact on Long-Term Holders
One of the most notable shifts in the market is the change in behavior of long-term holders, who typically retain their assets for over a year. These investors, known for their conviction and confidence in a recovery, are now showing a different side. The recent selling activity among them, as indicated by the spike in the ‘Age Consumed’ indicator, suggests a significant shift in sentiment, reflecting a declining conviction in the asset’s future prospects.
Implications for Ethereum’s Price
This lack of confidence among long-term holders is not a positive sign for Ethereum. The spike in the Age Consumed indicator suggests that these investors are uncertain about the potential for recovery. Consequently, this sentiment is likely contributing to the current bearish trend in Ethereum’s price.
ETH Price Prediction: Potential for Further Decline
Currently, Ethereum is trading at $3,578, facing resistance at the 50% Fibonacci Retracement level. The growing bearish sentiment among investors could strengthen this resistance, making it difficult for ETH to break through. If Ethereum fails to breach this level, it is likely to experience another dip. The expected decline could see ETH falling to around $3,400, just above the 38.2% Fibonacci level, which has historically acted as a support zone.
Conclusion
The recent price drop in Ethereum has led to increased skepticism among holders, particularly long-term investors. This shift in sentiment, evidenced by heightened selling pressure and spikes in the Age Consumed indicator, suggests a declining confidence in Ethereum’s recovery prospects. As a result, ETH may face additional downward pressure, potentially testing the support level at $3,400 if it fails to overcome the current resistance at the 50% Fibonacci Retracement level.
