Retail Investors Hold ETH Despite Recent Surge: CryptoQuant

Retail Investors Holding Strong on Ethereum (ETH)

Ethereum’s performance over the past month has been solid, with a notable 17.76% rally. Despite its slight 0.2% increase in the past 24 hours and a 2.7% decrease over the past week, ETH has surged by 38% year-to-date. However, what stands out is that retail investors appear to be holding onto their positions rather than taking profits. According to a report by CryptoQuant analyst Onatt, this suggests that many retail traders still view Ethereum as undervalued and are confident in its long-term potential.

Key Indicators: Why Are Investors Not Selling ETH?

Several key metrics highlight the “buy and hold” sentiment among retail Ethereum investors:

• Low Inflows to Deposit Addresses: Major crypto exchanges like Binance and OKX have seen minimal inflows into deposit addresses, indicating that traders are not liquidating their holdings for short-term profit-taking.
• Spent Output Profit Ratio (SOPR): The SOPR for ETH remains below 1.10, signaling that most Ethereum transactions are happening near breakeven levels, with minimal profits realized.

These indicators suggest that despite recent market fluctuations, investors remain confident in Ethereum’s future. The reluctance to sell highlights a belief that ETH’s price is still attractive and poised for further upside in the near term.

Could Ethereum Reach $4,000 in the Short-Term?

Onatt, the CryptoQuant analyst, believes that Ethereum could hit $4,000 in the short term, provided its price stays above the $2,800 level. This price target is based on the assumption that Ethereum’s current market sentiment remains intact and that its value will continue to grow as the broader crypto market stabilizes.

However, not all analysts share the same optimism. CryptoQuant founder and CEO Ki Young Ju expressed concerns in a tweet, stating that Ethereum’s future performance may depend on the ability of Web3 applications to generate revenue through stablecoins. He pointed out that Ethereum has been underperforming compared to Bitcoin, as evidenced by the ETH-BTC Net Unrealized Profit/Loss (NUPL) indicator hitting a four-year low.

Ethereum’s Long-Term Outlook: A Matter of Leverage and Regulation

Despite Ethereum’s recent underperformance, Ki Young Ju remains optimistic about its long-term prospects, particularly as the Web3 and DeFi ecosystems evolve. He believes Ethereum could gain appeal as regulatory frameworks take shape, which may drive more institutional adoption. However, Ju also notes that Ethereum’s ecosystem is currently heavily leveraged, which could pose challenges to its performance in the short term.

Ju’s assessment suggests that while Ethereum holds long-term potential, its short-term outlook is less appealing compared to Bitcoin, especially over a one-year timeframe. Nevertheless, Ethereum believers are still confident in the network’s ability to overcome its current challenges as the crypto landscape matures.

Conclusion: Will Ethereum Continue to Grow?

Ethereum (ETH) continues to be a strong contender in the crypto market, with investors holding firm despite recent market fluctuations. Retail sentiment is notably positive, as many believe that Ethereum is still undervalued, which could drive future price growth. However, Ethereum’s performance against Bitcoin and its reliance on the growth of Web3 applications may influence its near-term price action.

If Ethereum can maintain its current momentum and if the broader crypto market conditions remain favorable, ETH could potentially reach $4,000 in the short term. Investors should keep an eye on key metrics like SOPR, exchange inflows, and the performance of the Web3 ecosystem to gauge Ethereum’s future direction.