The Ethereum squad has joined forces with Solana to push back on the SEC claiming these cryptocurrencies could get branded as securities. While dealing with this regulatory beef, Ethereum’s price has dropped 18% since hitting highs on March 11th, according to analytics firm Santiment.
Whale activity around Ethereum is at the highest point of 2024 so far as the asset has traders picking sides over the SEC drama. Numbers show Ethereum’s 30-day average returns for wallets signal it’s a good time to buy. On top of that, its RSI has tanked to 28.5, the lowest for the #2 cryptocurrency by market cap since bottoming out in late January.
Assessing Ethereum’s Fundamentals Amidst FUD
Lucas, the Head Researcher at IntotheBlock, admits Ether FUD has been growing lately. But how much of it is real vs. just rumors? he says we need to look at the facts and on-chain data to get the full picture. ETH has underperformed Bitcoin price-wise recently, even lagging behind the S&P 500 when accounting for risk. The ETH/BTC ratio sits just above 0.05 right now, near its lowest since June 2022. But different story on the fundamentals.
Mainnet volume for Ethereum hit a level this week not seen since May 2022. And get this – transactions on layer 2 scaling solutions like Base, Optimism and Arbitrum are now over 2x higher in total than on the main Ethereum chain. Value held on these layer 2 chains doubled since last year to over 10 million ETH.
With that over 90% fee cut from the Dencun upgrade, layer 2 traction will probably keep climbing. These are signs that under the hood, Ethereum is steadily strengthening – something long-term ETH investors clearly understand.
Yeah, negative noise like the SEC maybe trying to un-commoditize Ether could impact an ETF is out there. But the amount of ETH held by OG wallets that have been hodling for over a year just keeps hitting new highs. Past cycles show that these diehards tend to buy through FUD before distributing later in bull runs.
Most important – the SEC already gave a green light to ETH futures ETFs, pretty much locking in its commodity status. Gonna be crazy tough to reverse that call now. Ethereum’s faithful are proving their conviction by shrugging off the short-term FUD and performance lags after the massive merge upgrade.
No doubt Ethereum is dealing with some adversity right now. But the on-chain activity across layer 1 and layer 2 shows growth underneath. Combined with unwavering holder support, it points to belief in Ethereum’s ability to rise higher long-term following its revolutionary shift to proof-of-stake.
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