The rise of Ethereum is stagnant, and the underlying reasons are being uncovered!
Many investors are very confused, especially those who heavily invested in Ethereum (ETH) during the last bull market. They watch Bitcoin soar while Ethereum languishes, filled with questions: why is there such a big gap? Below are three main reasons why Ethereum is difficult to rise in the short term.
Insufficient previous decline, adjustment not thorough enough
In the last bear market, from 2021 to 2022, ETH dropped from $4800 to $900, a decrease of 82%; Bitcoin fell from $69,000 to $15,500, a drop of 78%, which seems similar. However, in the 2018 bear market, ETH plummeted from $1400 to $80, a drop of nearly 95%! This shows that the current drop in Ethereum is not enough, and those who entered at high prices are still in the market. If the main force wants to push up, a large number of trapped positions will sell crazily, making it too expensive to push the price up, which is not worthwhile. If you are a market maker and haven't cleaned up your chips properly, you definitely won't push the price up. So now the price is fluctuating, taking time to compensate for the insufficient drop.
Market sentiment is overly optimistic, nearly blind
In recent years, Ethereum has been continuously favorable, such as the Shanghai upgrade and real assets on the blockchain, with influencers shouting that 'the last chance to get in is at $4000'. But major market movements never come when everyone is extremely confident; during euphoric sentiments, risks are quietly accumulating. Retail investors are overwhelmingly bullish, heavily invested, and even leveraging, while the main force will operate in the opposite direction. Because the main force knows that most people cannot hold on, a significant drop can make them hand over their chips. The short-term market is a game of emotions, a competition of who can predict faster.
Big players' stable holdings restrict market development
A large amount of Ethereum chips are in the hands of early big players, like those who bought at $10 or even below $1, and they neither sell nor transfer. How can the main force easily pull the coin price to $10,000? They have no idea how many low-priced chips are waiting to be dumped. These big players have become an obstacle to Ethereum's rise; to start a new bull market, they must first be shaken or exited, which usually comes with a more severe drop.
