• According to different on-chain data, Ethereum miners are selling across cryptocurrency exchanges. The trend has been evident in the price of the Ethereum, which hasnotably stagnated against Bitcoin. But is there any positive factors for Ethereum price on the medium term?

    The cryptocurrency market is portraying unusual market dynamics. Ethereum has been dropping or staying stagnant while BTC has continuously rallied.

    Why ETH Has Been Struggling Against BTC?

    The struggle of ETH against BTC is especially noticeable on the ETH/BTC chart. Since September 1, which marked the peak of major decentralized finance (DeFi) tokens, like Yearn.finance (YFI), Aave, and Maker, ETH underperformed against Bitcoin.

    Ethereum might have fallen against Bitcoin solely because the momentum of the dominant crypto has been unexpectedly strong.

    Atop several macro reasons, such as increasing inflation and the election risk, the institutional demand for Bitcoin has exponentially increased. As a result, the appetite for cryptocurrencies mainly shifted to BTC, causing altcoins to drop off.

    But, another reason behind the declining price of Ethereum might have been the sell-off from miners.

    According to the data from Santiment, an on-chain market analysis company, Ethereum miners have been “dumping.” The term dumping is used within the cryptocurrency market to describe when miners or investors sell large quantities of their holdings.

    “The Ethereum miners have been dumping, and it appears that last week’s increased on-chain activity and trader FOMO has slowed,” the researchers at Santiment noted.

    Along with miners, dormant coins have also moved as the price of ETH declined in the past weeks. Dormant coins are ETH holdings that have not moved for a long time. Normally, that suggests long-time ETH investors either sold their holdings or moved them to new addresses.

    Positive Factors For Ethereum In The Medium Term

    The potential miner-induced sell-off and the stagnancy of Ethereum could positively affect Ethereum in the medium term for three factors.

    • Despite increasing by over four-fold since March, Ethereum is no longer overcrowded. There is no fear of missing out (FOMO) and excitement from investors in the market. That shows that the Ethereum uptrend is likely not overextended.
    • Second, after the initial cycle of selling ETH ends, then the selling pressure on the cryptocurrency could significantly fall.
    • Third, while the technical factors suggest ETH can rise, the DeFi market’s total value locked is continuously increasing. This metric represents that the user activity on the Ethereum blockchain network is increasing.

    In the short term, however, technical analysts do not expect ETH to outperform Bitcoin until it bottoms out against Bitcoin. Michael van de Poppe, a well-known trader at the Amsterdam Stock Exchange, said that ETH historically rallied in December, often after BTC saw an initial upsurge.

    “Don’t avoid historical data. Previous 5 years, December was the best period to buy ETH. That would line up with a beautiful retest of the 0.026 sats area. And when ETH does well, the rest will follow. In trading, patience is required,” he said.

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