Ether’s social sentiment has reached its lowest point this year, indicating potential for a market reversal, according to blockchain analytics platform Santiment. While Ether’s price has underperformed compared to other cryptocurrencies, experts suggest this bearish sentiment might signal a bottom in the market cycle, potentially leading to a rebound. Over the last month, Ether’s value has declined by over 20%, trading at $2,176, while Bitcoin’s price has decreased by 10%, reaching $88,000.
Mike Cahill, CEO of Douro Labs, emphasizes the importance of distinguishing short-term trends from the solid long-term fundamentals of cryptocurrencies like Ether. He notes that historically, a dip in social sentiment often aligns with market bottoms, as sentiment generally follows price movements rather than predicting them.
Dominick John of Kronos Research explains that although Ether’s current performance might deter short-term investors, persistent negativity could signal that the currency is primed for a significant rebound. Factors such as decreasing interest rates or regulatory clarity around ETH staking in ETFs could catalyze an increase in its value. Additionally, institutional interest remains strong, exemplified by World Liberty Financial increasing its Ether investments by $10 million in a week.
Santiment’s social sentiment tracker reveals more bearish discussions about Ether on platforms like X, Reddit, and Telegram compared to other major cryptocurrencies. Traders were bullish on Ether during the last crypto bull market but turned bearish after September, a sentiment persisting into this year.
Analysts are exploring possible reasons for Ether’s challenges, which include decreasing network activity and investor concerns about its supply emission rate. Nonetheless, its MVRV Z-Score, an indicator of whether Ether is overvalued or undervalued, suggests it is currently at its most undervalued position in 17 months, often preceding substantial price recoveries.
