Ethereum [ETH] was changing hands at $2,257.62 at the time of publishing after a drop of 2.1% in the past 24 hours. The downturn was not a short-term effect, as the monthly and yearly price action also exhibited declines of 4.92% and 13%, respectively.
The technical indicators like the RSI and the MACD further confirmed the bearish momentum surrounding ETH.
Ethereum’s realized profits bring fresh optimism
Santiment noted that Ethereum recorded its highest network realized profits in three weeks, even though the cryptocurrency was moving in a stagnant range.
As per the charts, the realized profits had hit $74.58 million, whereas ETH’s price was down by 5.5% in the past three days. This confirmed the ‘buy-the-dip’ strategy wherein retail investors were not paying attention to the short-term noises.
Additionally, despite the market oscillating between “Fear” and “Extreme Fear” zones for most of February and March, investors didn’t step back from buying ETH.
As a result, the wallets that accumulated during those turbulent months are now in profit despite the May downturn. Santiment Intelligence also added,
Many have decided to sell while they feel they still have the opportunity to enjoy a profit.
Retail vs. insitutonal particpatioon
As for the institutional side, the ETH ETF also saw inflows totaling $947.2 million in February and March. Outflows, however, had outpaced a lot during those months, totaling $1.36 billion.
Even so, the 180-day and 7-day MVRV ratios and Open Interest indicate that while short-term traders are regaining confidence, long-term holders have not yet fully recovered their losses.
This typically indicates that although the market is improving structurally, it is still susceptible to swings caused by volatility and liquidation. Santiment summed up,
Based on current ETH trader behavior, lean cautious… but this doesn’t necessarily imply you should get bearish.
This comes on the heels of Grayscale being unduly optimistic about plans to cap Ethereum staking rewards.
Final Summary
- ETH has been unable to break above the $2600 resistance after the 31st of January and is still struggling around $2200.
- Retail participation suggests that the buy-the-dip strategy has resulted in $74.58 million in realized profits.
