Ethereum Braces for 2022-Style Choppy Markets—Traders Eye Deja Vu

Ethereum’s price action is flashing eerie parallels to its 2022 consolidation phase—just as Wall Street ’experts’ start recycling their old slide decks. Here’s why ETH might be stuck in neutral:

The technical déjà vu: On-chain metrics and whale activity mirror pre-merge behavior, when ETH traded sideways for months. This time, though, gas fees are higher and the SEC’s lawyers are better paid.

Liquidity crunch: Memecoin mania drained ETH pools dry, leaving less ammunition for sustained rallies. Meanwhile, institutions keep pretending they care about ’real-world assets’ while chasing 100x shitcoin leverage.

The closer: Until spot ETF volumes materialize (read: never), ETH could be trapped between $3K support and $4K resistance—giving traders ample time to lose money both ways.

Capitulation pressure from cost basis undercut

Ethereum is currently trading 12% below its realized price of $2,002, signaling that the average holder holds a net unrealized loss position.

Source: Glassnode

Historically, this condition has reflected a market in correction or consolidation, where long-term confidence tests holders.

As illustrated in the chart, during the 2018 cycle, capitulation from average holders spiked, and insufficient bid-side absorption of the available ETH supply led to a significant drawdown until the market established a price floor.

Therefore, unless ETH reclaims and sustains levels above its realized price, the path of least resistance remains sideways to slightly bearish. 

Any rally toward $2,000 may encounter profit-taking from underwater holders, which would reinforce that level as a key overhead resistance zone.

 Bullish pattern identified in Ethereum’s on-chain activity

CryptoQuant data has revealed a quiet but remarkable pattern emerging deep within Ethereum’s on-chain activity. 

A surge in inflows to a specific group of wallets — those that have never sold and follow strict accumulation-only behavior — is taking place.

Over the last 48 hours, more than 640,000 ETH has flowed into these addresses, marking the largest inflow since 2018. 

Source: CryptoQuant

As AMBCrypto highlighted earlier, Ethereum’s price remains significantly undervalued. This activity suggests that these silent hands might be signaling something the market has yet to price in.

Still, the subsequent 15% rebound following this accumulation phase establishes a structurally bullish range. Hence, providing a supportive base for future upside. 

Consequently, rather than repeating a 2018-style capitulation, Ethereum could be entering a 2022-2023 consolidation phase.

During this phase, ETH’s price action remained range-bound below $2,200 before eventually breaking through resistance levels in Q1 2024.