HODLing Ethereum? Is it still worth it

Ethereum’s price has witnessed a 324% hike since the beginning of this year, but the likes of Binance Coin and Cardano have fetched investors 845% and 707% returns, respectively. In fact, other alts from the space like Solana and LUNA have rallied by 2550% and 2124% in the same Year-to-Day time window.

Being the leader of the altcoin, is Ethereum underperforming at this stage, or are market participants over-expecting from this alt?

Are the metrics turning bullish? 

Price-Daily Active Addresses Divergence is a relationship model between the coin’s performance and the number of daily active addresses that interact with the it during that time period. Now, as can be seen from the chart attached, Price DAA divergence has been in the bearish zone since November 2020.

However, when the alt was busy creating new ATHs in the April-May period, the intensity of the bearishness reduced. Interestingly, the same has been happening of late. If the same trend prolongs, ETH’s price would end up rallying in the coming days.

Source: Santiment

As a matter of fact, Ethereum’s trading volume has started picking up pace. The same has managed to increase by two-fold (from 13.7 billion to 33 billion) since mid-July. This essentially means that market participants have actively been engaging with ETH over the past few days.

Furthermore, the alt’s velocity has remained quite stable since the beginning of August. In fact, Glassnode’s data pointed out that the same has been oscillating in the 0.01 to 0.02 range lately. At this stage, it should be noted that a rally is usually accompanied by steady velocity and is seldom sustained in a turbulent landscape.

When compared to the beginning of July, Ethereum’s volatility has been spending more time on lower side. A highly volatile environment usually aids an asset to set new highs quickly. However, at the same time, it doesn’t take much time for its price to massively dunk as well. Now, this is one of the main reasons why the market’s largest alt has not been able to deliver higher returns when compared to its counterparts.

Source: CoinGecko

Despite a few hiccups, on-chain metrics, by and large, present a favorable picture for ETH’s rally. When the rally commences, the market would see a lot more action and investors would most likely earn more on their investments. As a matter of fact, Ethereum’s price has witnessed a 26% hike in the past seven days alone and its valuation at press time explicitly stood at $3162. So yes, it is worth HODLing ETH.