Recent data from IntoTheBlock reveals that a notable 61% of Ethereum holders are currently experiencing profits. This figure starkly contrasts the recent bear market when the percentage of profitable holders plunged to just 46%. Historical context underscores the significance of this data, as after the 2017 market cycle, the proportion of holders in profit dropped to a mere 3%.
These statistics highlight two crucial insights: first, Ethereum’s current market demonstrates remarkable resilience, indicating that many holders maintain confidence in the long-term value of $ETH despite downturns.
Second, looking back to the 2019/2020 period, ETH saw its profitable addresses briefly dip below 10%, raising the specter of a similar scenario that could lead to revisiting bear market lows. However, the current landscape suggests that any potential downturn might be less severe than in previous cycles.
Adding to the complexity of Ethereum’s market dynamics, analyst Ali has identified key support levels for ETH ranging between $2,290 and $2,360. This range is significant, as approximately 1.90 million addresses hold around 52.30 million $ETH within this demand zone. A sell-off could be triggered if this critical support level falters, potentially pushing ETH towards the $1,800 mark.
Ethereum’s Futures Market Hits 2024 Low
The bearish sentiment surrounding Ethereum is further exacerbated by developments in the futures market, where funding rates have recently reached their lowest point of 2024, according to CryptoQuant. The perpetual futures market is instrumental in influencing the overall price trajectory of the crypto sector. By examining futures traders’ sentiment, insights into possible future price movements emerge.
The current 50-day moving average of Ethereum’s funding rates reflects a consistent downtrend, signaling a pervasive bearish outlook and diminishing buying interest among traders. For Ethereum to rebound and achieve higher price points, demand within the perpetual futures market must increase.
If negative funding rates persist, further price declines in Ethereum’s mid-term trajectory seem likely. Nonetheless, it’s essential to recognize that while often viewed as bearish, negative funding rates can sometimes foreshadow market recovery. Such conditions may lead to short liquidation cascades, resulting in price reversals.
However, this scenario hinges on the presence of sufficient spot buying pressure to support a rebound. Without a surge in demand from spot buyers, Ethereum’s price may continue to face downward pressure, underscoring the delicate balance between market sentiment and price movement in the current crypto landscape.
Related Reading | Top 5 Best Crypto Staking Platforms in 2024
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