Ethereum’s Holding Pattern: Why Retail Investors Refuse to Sell Despite Recent Gains

Ethereum Retail Investors Hold Steady Despite Gains: Is ETH Still Undervalued?

Ethereum has recently seen modest price increases, but retail investors seem unwilling to take profits, signaling their belief that the asset remains undervalued. Despite volatile market conditions and a notable year-to-date rise, ETH holders maintain a strong “buy-and-hold” strategy, reflecting confidence in its long-term potential.

Retail Investors: Holding Instead of Selling

At the time of writing, Ethereum trades at $3,100, reflecting a slight daily gain of 0.2% but a weekly dip of 2.7%. On a monthly scale, however, the cryptocurrency has surged by 17.76%, contributing to an impressive 38% rise for the year. Yet, this price performance has not triggered a wave of profit-taking from retail investors.

According to Onatt, a pseudonymous analyst on CryptoQuant, key on-chain metrics suggest that ETH holders are resisting the urge to sell. For instance, inflows to deposit addresses on major exchanges like Binance and OKX remain low—a clear indicator that liquidation activity is subdued.

Additionally, Ethereum’s Spent Output Profit Ratio (SOPR) hovers below 1.10, signifying that most transactions are occurring near breakeven levels. Minimal realized profits suggest investors are confident ETH’s current valuation has room to grow.

“Despite recent volatility, these metrics highlight a strong commitment to holding ETH. Market participants appear convinced that its long-term upside outweighs the temptation to sell now,” Onatt noted.

Can Ethereum Break $4,000?

The big question on traders’ minds: can ETH breach the $4,000 level in the near term? Onatt believes that as long as Ethereum maintains a price floor above $2,800, such a rally is possible. However, the outlook is not universally optimistic.

CryptoQuant CEO Ki Young Ju offered a more tempered perspective, suggesting that Ethereum’s performance depends on its ecosystem’s ability to generate substantial revenue, particularly through stablecoin transactions in Web3 applications.

Ju pointed to Ethereum’s underperformance against Bitcoin, as evidenced by the ETH-BTC Net Unrealized Profit/Loss (NUPL) indicator, which recently hit a four-year low. This metric highlights Ethereum’s growing challenges, particularly its ecosystem’s leverage-heavy nature.

The Long Road Ahead for Ethereum

While Ethereum’s long-term potential may remain compelling, its short-term prospects face headwinds. Ju argued that structural issues within the Ethereum ecosystem, including its reliance on leverage, could weigh on performance in the near future.

“Over a one-year horizon, Ethereum appears less appealing than Bitcoin,” Ju stated. “However, as regulatory clarity improves, ETH could regain its attractiveness.

”For now, Ethereum remains a battleground between long-term believers and skeptics. Retail investors’ reluctance to sell underscores faith in its growth potential, but achieving significant price milestones like $4,000 may hinge on external factors, including broader ecosystem adoption and regulatory developments.

Summary

In summary, Ethereum’s price action reflects a market at a crossroads. While retail investors double down on their belief in ETH’s under valuation, its short-term trajectory remains uncertain, tethered to both macroeconomic factors and its evolving ecosystem dynamics