Ethereum NUPL Indicates Growing Panic: A Look at How a $3K Shift May Alter Perspectives

Key Points

• Ethereum’s Long-Term Holder NUPL indicates rising investor anxiety as prices remain below $3,000.
• The CBOE’s approval for 21Shares to stake ETH could act as a catalyst for potential growth.

The Long-Term Holder Net Unrealized Profit/Loss (NUPL) for Ethereum (ETH) shows increasing investor unease as the cryptocurrency’s price stays below the $3,000 threshold.

The NUPL is currently indicating a trend towards anxiety, implying that long-term investors may be experiencing a decrease in unrealized gains, which could impact their confidence.

Breaking the $3K Barrier

A decisive move above $3,000 could potentially shift investor sentiment from anxiety to optimism. This shift was observed in mid-2023 when Ethereum approached these levels, resulting in significant rallies.

A similar move could stimulate investor confidence, encouraging holding and attracting new buyers, which could drive Ethereum’s price upwards. However, if Ethereum fails to surpass the $3,000 mark, long-term holders might increase sell-offs due to fears of further losses.

Such a scenario could result in a further decrease in Ethereum’s price, deepening market anxiety and pushing the NUPL into lower zones, akin to the capitulation observed in early 2023. This could potentially amplify the downward pressure on Ethereum’s market value.

Staking ETH: A Potential Catalyst

Despite the prevailing anxiety, Ethereum investors have reason to remain hopeful. The CBOE recently filed a proposal to allow 21Shares to introduce staking within its Ethereum Spot ETF.

This decision, approved by the Exchange’s President on February 12, 2025, could serve as a significant catalyst for Ethereum’s growth. Staking Ethereum involves holding the cryptocurrency to support blockchain operations in exchange for rewards.

The approval enables the ETF to engage in staking, potentially increasing the value of holding Ethereum through the ETF by offering additional yield from staking rewards. This development could rejuvenate investor confidence in Ethereum, particularly after a period of market volatility.

By incorporating staking, the ETF provides a dual benefit of exposure to Ethereum’s price movements and the additional income from staking.

Historical Performance and Current Trends

It’s important to note that Ethereum has historically performed well in Q1, despite currently trading at a 22% discount. This drop could be due to early-year volatility or broader market trends impacting crypto assets.

Historically, Q1 has seen average gains of about 80% for Ethereum, except for in 2018 and 2022. This suggests a possible rebound or upward correction as the quarter progresses.

If market sentiment improves or influential crypto events occur, Ethereum could recover from its current lows and aim for gains similar to past first quarters. However, if the market remains bearish or external economic factors exert downward pressure, the discount could persist or deepen, leading to a subdued Q1 performance for Ethereum.