Decentral Block Post

Ether (ETH) price nosedived below $1,100 in the early hours of June 14 to prices not seen since January 2021. The downside move marks a 78% correction since the $4,870 all-time high on Nov. 10, 2021.

More importantly, Ether has underperformed Bitcoin (BTC) by 33% between May 10 and June 14, 2022, and the last time a similar event happened was mid-2021.

Even though Bitcoin oscillated in a narrow range two weeks before the 0.082 ETH/BTC peak, this period marked the “DeFi Summer” peak when the Ethereum network’s total value locked (TVL) catapulted to $93 billion from $42 billion two months earlier.

What’s behind Ether’s 2021 underperformance?

Before jumping to conclusions, a broader set of data is needed to understand what led to the 31% correction in the ETH/BTC price in 2021. Looking at the number of active addresses is a good place to start.

Data shows steady growth in active addresses, which increased from 595,620 in mid-March to 857,520 in mid-May. So, not only did the TVL growth take investors by surprise, but so did the number of users.

Ether (ETH) price nosedived below $1,100 in the early hours of June 14 to prices not seen since January 2021. The downside move marks a 78% correction since the $4,870 all-time high on Nov. 10, 2021.

More importantly, Ether has underperformed Bitcoin (BTC) by 33% between May 10 and June 14, 2022, and the last time a similar event happened was mid-2021.

Even though Bitcoin oscillated in a narrow range two weeks before the 0.082 ETH/BTC peak, this period marked the “DeFi Summer” peak when the Ethereum network’s total value locked (TVL) catapulted to $93 billion from $42 billion two months earlier.

What’s behind Ether’s 2021 underperformance?

Before jumping to conclusions, a broader set of data is needed to understand what led to the 31% correction in the ETH/BTC price in 2021. Looking at the number of active addresses is a good place to start.

Data shows steady growth in active addresses, which increased from 595,620 in mid-March to 857,520 in mid-May. So, not only did the TVL growth take investors by surprise, but so did the number of users.

On June 14, discussions of Celsius continued to populate media headlines and June 14's news involved the platform's CEL token accruing massive gains after what appears to have been either an exchange glitch or a short-squeeze. CEL price spiked from $0.18  to $1.55 in one abrupt candle before sinking back to $0.60 within the same one-hour candle.

Currently, analysts are on the fence about the reason for the explosive price breakout. Some cite Celsius repaying a portion of its debts as a reason, while others pinpoint a possible error on the FTX exchange as the reason for what appears to be a short squeeze.

Are debt repayments boosting investor confidence?

Celsius has been scrambling to cover a number of its debts and it is possible that some investors view this as a sign that the platform will be able to survive the current mayhem. 

Twitter analyst Hsaka said that on-chain data shows that the $28 million in Dai (DAI) that was recently deposited into a wallet controlled by Celsius and has since been sent to a separate address, which he identified as a debt repayment address.

Analysts believe that the Celsius's strategy is to lower its liquidation price in the MakerDAO vaults  where it holds funds and ultimately avoid insolvency.

On June 14, discussions of Celsius continued to populate media headlines and June 14's news involved the platform's CEL token accruing massive gains after what appears to have been either an exchange glitch or a short-squeeze. CEL price spiked from $0.18  to $1.55 in one abrupt candle before sinking back to $0.60 within the same one-hour candle.

Currently, analysts are on the fence about the reason for the explosive price breakout. Some cite Celsius repaying a portion of its debts as a reason, while others pinpoint a possible error on the FTX exchange as the reason for what appears to be a short squeeze.

Are debt repayments boosting investor confidence?

Celsius has been scrambling to cover a number of its debts and it is possible that some investors view this as a sign that the platform will be able to survive the current mayhem. 

Twitter analyst Hsaka said that on-chain data shows that the $28 million in Dai (DAI) that was recently deposited into a wallet controlled by Celsius and has since been sent to a separate address, which he identified as a debt repayment address.

Analysts believe that the Celsius's strategy is to lower its liquidation price in the MakerDAO vaults  where it holds funds and ultimately avoid insolvency.

Ethereum's native token Ether (ETH) is showing signs of bottoming out as ETH price bounced off a key support zone. Notably, ETH price is now holding above the key support level of the 200-week simple moving average (SMA) near $1,196. 

The 200-week SMA support seems purely psychological, partly due to its ability to serve as bottom levels in the previous Bitcoin bear markets.

Independent market analyst "Bluntz" argues that the curvy level would also serve as a strong price floor for Ether where accumulation is likely. 

He notes:

"BTC has bottomed 4x at the 200wma dating back to 2014. [Probably] safe to assume it's a pretty strong level. Sure we can wick below it, but there [are] also six days left in the week."

Bitcoin (BTC) crept higher after the June 14 Wall Street open as analysts hoped that long-term support had been preserved.

Hopes for "relief" from FOMC meeting

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it traded above $22,500 at the time of writing, having hit local highs of $23,300 on the day.

The pair had seen a strong bounce after nearing $20,800, with traditional markets likewise recovering after panic set in over United States inflation.

Eyeing where Bitcoin could go next, on-chain analytics resource Material Indicators noted that the market had reclaimed the 200-day simple moving average (200 SMA), an important feature of Bitcoin bear markets that acted as support throughout previous price cycles.

Nonetheless, it was "too early to tell" if the 200 SMA would continue to provide an attractive zone, a tweet stated, with the Federal Reserve due to provide inflation cues on June 15.