"Ethereum's Price Plunge: Sellers Unleashed, Buying Opportunity Looms"

Ethereum's recent price action has raised concerns about the potential for strong sellers to limit the cryptocurrency's upside. Despite a brief period of consolidation around $2,600 in February, on-chain metrics suggest that Ethereum's sellers are far from exhausted. The Bybit hack, which saw $1.46 billion worth of Ethereum siphoned out of a cold wallet, has added to the uncertainty surrounding the cryptocurrency's price.

Crypto analyst RektProof noted a pattern emerging in a recent post, suggesting that Ethereum's range formation from Q1 2024 is still in play. The recent events provided a deviation below the lows, which is also a place where accumulation occurred from July-October 2024 before the swift rally in November. A comparison with Bitcoin making cycle lows on the back of black swan events such as COVID or the FTX crash was also made, implying that ETH might also be making such lows. However, it remains to be seen whether this is too good to be true.

Metrics from Glassnode suggest that Ethereum has room to go lower. The seller exhaustion metric, which is a product of the percentage supply in profit and the 30-day price volatility, has been rising in recent weeks. This is due to high volatility and a falling percent supply in profit. The metric is used to mark low-risk price bottoms when a sizeable chunk of the supply is not in profit and the price is under consolidation. However, the prevailing market conditions do not reflect that, at least not on the higher timeframes.

The percentage supply in profit has been falling since the price faced rejection from $4k in December. At press time, the metric was lower than at any point since October 2023. Its weak performance while Bitcoin traded near $100k has been a source of frustration for holders. The short-term holder (STH) net unrealized profit/loss (NUPL) takes into account transactions younger than 155 days. Values below 0 indicate that STHs are at a loss, and at press time, the metric was at -0.164.

Combined with the range formation highlighted earlier, it appeared that this could be a good buying opportunity for ETH. However, the NUPL being negative does not automatically mark local bottoms. For example, in January