Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with data, charts and patterns, he's interested in making the intricate, complex landscape of digital assets easier for every user.
Ethereum sentiment has turned negative as investors reportedly shift to SOL and ETH.
Key Notes
- Ethereum sentiment has turned negative and hit August levels.
- The weak sentiment was marked by ETH sell-off and reduced whale exposure.
- Crypto VC founder projected that the trend might continue for awhile.
Investors have recently become less optimistic about Ethereum ETH $3 172 24h volatility: 4.4% Market cap: $381.62 B Vol. 24h: $34.28 B price prospects, as seen by negative market sentiment. According to Kaito data, ETH market sentiment turned negative beyond August levels.
It’s worth noting that the August weakening happened during a broader market sell-off. However, the recent weak sentiment was linked to the ongoing FUD on the altcoin’s underperformance against Solana SOL $205.3 24h volatility: 2.1% Market cap: $96.77 B Vol. 24h: $5.74 B and Bitcoin BTC $78 844 24h volatility: 3.1% Market cap: $1.56 T Vol. 24h: $42.25 B .
ETH Underperforms SOL and BTC
This mid-recovery saw ETH decline further as SOL and BTC rose, a trend that has become apparent since early 2024. In fact, the SOL/ETH ratio, which tracks SOL’s relative value against ETH, hit a new all-time high (ATH) of 0.070 this week. That meant SOL outperformed ETH.
Reacting to the SOL outperformance, Andrew Kang, co-founder of crypto VC Mechanism Capital, stated that the trend might continue and drive ETH sell-off.
“Long Solana hedged with BTC or ETH has been one of the best risk-adjusted positions you could have put on with major size this year. With new entrants choosing Solana and OGs slowly selling off their ETH, I see no reason for this trend to change,” Kang wrote.
ETH Price Action
The recent ETH price decline was also notable as whales appeared less interested in the altcoin, as shown by the negative Whales vs. Retail Delta. This meant that whales weren’t going long on the asset relative to retail. The reduced whale exposure always precedes price declines.
However, the ETH price might see relief if whale interest improves. For context, a surge in whale positions in mid-October triggered an ETH price rally above $2.7K. So, unless whale demand improves, ETH pullback could extend in the short term.
On the price charts, ETH slipped below $2500 at the time of writing. It was down 10% from its recent high of $2.76K. Should the decline extend, the trendline support and demand zone above $2.3K could be key levels to watch in the short term.
The reduced demand among US spot ETH ETFs could also be a challenge for the altcoin’s price. The products began the week with $20.8 million outflows on Monday.
Between Tuesday and Thursday, the products managed to net over $15 million in inflows, translating to a total weekly outflow of about $5 million, exclusive of Friday’s data. In short, the demand was net negative as of press time and could delay a strong price reversal.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.