Ether's Social Sentiment Hits Yearly Low Amid Price Underperformance
According to Cointelegraph, social sentiment surrounding Ether has reached its lowest point this year as its price lags behind other cryptocurrencies. This trend, however, might indicate a potential rebound, as suggested by blockchain data platform Santiment. The platform's social sentiment tracker reveals that discussions about Ether on social media platforms like X, Reddit, and Telegram are more bearish compared to other major cryptocurrencies. Santiment noted in a March 5 post that for those holding Ether, the prevailing bearish sentiment could signal a turnaround once the crypto markets stabilize.
Ether's sentiment was notably bullish during last year's broader crypto bull market but has since shifted to a bearish outlook. The price of Ether has fallen over 20% in the past month, trading at $2,176, according to CoinMarketCap. In contrast, Bitcoin has only seen a 10% decline, trading at $88,000 per coin. Mike Cahill, CEO of Douro Labs and a contributor to the Pyth Network, emphasized the importance of distinguishing short-term narratives from long-term fundamentals. He pointed out that historically, extreme bearish sentiment often aligns with market bottoms, suggesting that if crypto markets stabilize, Ether could benefit from renewed liquidity and institutional interest.
From March to September of last year, sentiment towards Ether was primarily bullish amid a broader crypto bull market, but it turned bearish after September, continuing into the new year. Dominick John, an analyst at Kronos Research, mentioned that while Ether's performance might discourage short-term investors, extreme negativity often signals the bottom of a cycle, potentially setting the stage for a significant rebound. Factors such as decreasing interest rates or regulatory developments around staking ETH within ETFs could drive its price higher. Additionally, continued institutional buying, including by Trump’s World Liberty Financial, indicates growing long-term confidence. The Trump family-backed World Liberty Financial DeFi platform notably increased its Ether holdings by $10 million over a week.
Santiment's tracker analyzes crypto-specific social media channels like X to identify the top 10 words with the most significant increase in mentions compared to the previous two weeks. Analysts speculate that Ether's struggles are due to weakening network activity, declining total value locked (TVL), and investor concerns about its supply emission rate. Ether’s MVRV Z-Score, a key metric for evaluating whether its native token is overvalued or undervalued, has recently dropped to its lowest level in 17 months. The last time Ether's MVRV Z-Score reached similar lows was in October 2023, preceding a nearly 160% rebound. Previous dips in December 2022 and March 2020 also led to bull runs.
