Ethereum (ETH) Price Attempts to Stabilize After Dipping Below $1,600. Long-Term Holders Have Entered Capitulation Territory

Ethereum price is attempting to stabilize after dipping below $1,600. Long-term holders have entered capitulation territory for the first time in months.

Crypto ELITEs, a well-known analyst on X, previously known as Twitter, has developed a roadmap for Ethereum’s (ETH) potential recovery to $5,000 by May 2024.

This prediction follows a significant drop in ETH price below $1,600, pushing LTH-NUPL into capitulation territory for the first time in several months.

Meanwhile, on-chain data from Glassnode reveals a spike in user activity and a shift in large transactions.Crypto ELITEs focused on a historical pattern of accumulation, usually seen in bear markets, followed by a steep expansion phase, typically seen in bull markets.

“They never fully capitalize on the opportunity until it’s too late,” the analyst said.

Chart of ETH price cycles highlighting the potential transition into a new bullish phase and setting the stage for a final push toward $5,000.

Credit: Crypto ELITEs/X

After a steep decline from $2,000, Ethereum has shown resilience, bouncing several times near the $1,800 support.

This resilience is crucial as it can set the stage for a final push toward breakout.

Crypto ELITEs noted that the analyst is projecting a final shakeout in ETH price before the cryptocurrency experiences parabolic expansion.

The projected path closely resembles previous cycles, where consolidation zones were seen ahead of explosive trends.

If this roadmap plays out, the analyst believes that ETH could rally significantly once the strong resistance is cleared.

The chart also showed the structure, highlighting a bottoming phase and then the projected upside momentum.

Crypto ELITEs said:

“This is a long-term opportunity despite short-term volatility.”

Nevertheless, on-chain metrics are showing signs of a shift.

As the price dipped below $1,600, a key indicator, LTH-NUPL, slipped into capitulation.

This metric tracks the unrealized profit or loss of long-term Ethereum holders. When it falls below zero, it indicates that LTHs are collectively in losses.

This reading went negative for the first time since November 2022, and it has only happened five times in the past seven years.

Generally, this metric turning red marks the final stage of a bearish trend. It suggests that experienced market participants are surrendering, which can set the stage for reversals.

Meanwhile, the MVRV Long/Short Difference has plummeged to -22.26%, indicating that ETH is significantly undervalued.

This level is usually reached at points of maximum pain and has coincided with ideal accumulation zones in past cycles. Such conditions usually encourage strategic investors to readjust their positions.

In other developments, large transactions have become more active. Over 530,000 ETH was transferred between whale wallets last week, possibly for rebalancing.

One notable event was the sale of 10,702 ETH by a dormant wallet from 2016. The last activity on this wallet was during major corrections, suggesting an attempt to induce panic before recovery.

Despite the bearish price action, Ethereum network activity has spiked. Daily active addresses reached 573,000, and transaction volume hit 1.42 million on April 9.

This increased activity during market stress suggests a rise in network utility and user interest at lower valuations.