Both Bitcoin and Ether experienced downward price movements following the former’s last block subsidy halving in April. However, Ethereum bulls have been challenged over the past few weeks as Bitcoin witnessed one of its biggest declines since FTX’s late 2022 crash.

“We may see a similar bearish structure for Ethereum, with noticeably shallower corrections since the FTX bottoms. This leads to a degree of resilience during pullbacks and a clear volatility reduction in the digital asset space,” Glassnode wrote.

“However, it is worth noting that Ethereum’s deepest decline of the cycle was -44%, which is twice as severe as Bitcoin’s -21%. This highlights the relatively poor performance of Ethereum over the last 2 years and this “The situation is also reflected in a weaker ETH/BTC ratio.”

Although the size of ETH price declines has diminished, certain groups of investors now face the risk of their holdings falling into the red.

Ethereum’s short-term investors (STHs) - assets that have held the coin for 155 days or less - keep their total cost base at exactly $3,000. According to data from TradingView, ETH/USD continues to trade rapidly at this level after briefly falling below this level last week.

Glassnode analyzed Ethereum’s market capitalization to realized value (MVRV) metric, suggesting that a new market decline could cause panic among these assets. MVRV measures the unrealized profit and loss for STHs at a given price, here.

“Ethereum’s STH-MVRV is currently trading at a very slight premium, which may indicate that spot prices may be too close to the cost basis of recent buyers and they may panic if the market experiences downside volatility,” he warned.

Glassnode acknowledged that the market is awaiting signals from United States regulators on the status of spot Ether exchange-traded funds (ETFs). Meanwhile, long-term investors (LTHs) appear reluctant to sell en masse at current prices, even though they have already achieved healthy profit margins.

“If we examine the Volume Spent for Profit (for LTHs), we can see that Bitcoin investors who HODLed between 6 months and 2 years increased their disposals during the ATH rally,” the newsletter continued. “From this perspective, Ethereum’s Long-Term Investors seem to be waiting for better profit-making opportunities once again.”