Ethereum: The Newest Fad or Just Another Passing Fancy? 💸

by
  • Oh darling, short-term ETH traders have crossed the 4 million mark, a threshold that has historically triggered quite the raucous rallies!
  • ETH could waltz back to $2.8K if demand holds, but with retention rates plummeting, we might just be looking at a sad little $2,448 instead.

After a rather dreary downtrend, Ethereum [ETH] has decided to don its party hat and enter a recovery phase. Demand for this altcoin is rising like a soufflé, but will it hold? 🎉

In fact, Ethereum’s number of short-term investors has surged over the past day to a rather critical threshold of 4 million. How positively thrilling! 🥳

According to the ever-so-astute CryptoQuant analyst Burak Kesmeci, this is one of the most significant aspects of the altcoin’s potential bull run. But let’s not get too carried away, shall we?

The rise in short-term investors could boost risk appetite for altcoins, particularly Ether, which is the only altcoin with a spot ETF. How exclusive! 💁‍♂️

Its performance significantly influences altcoin and market sentiments, making Ethereum a mini-index for the altcoin bull market. Quite the responsibility for a mere cryptocurrency!

The rise of short-term investors acts as a market catalyst for Ethereum. Periods of significant price increases often align with the number of traders surpassing 4 million, indicating that short-term interest drives these rallies. Who knew trading could be so dramatic?

High demand from new small traders boosts prices, while numbers below 4 million lead to difficulty in sustaining price uptrends and often result in declines. It’s like a party where everyone leaves before the cake is served!

For example, in December 2024, when traders exceeded 4 million, ETH prices surged past $4,000, whereas in February 2025, the price fell faster than a soufflé in a thunderstorm as traders began to leave. Oh, the irony!

This trend suggests that 4 million traders is a key threshold for short- to medium-term price movements. But here’s the kicker: Are they sticking around?

Although Ethereum short-term investors are rising again, hitting 4 million, the altcoin’s Monthly Cohort Retention Rate has steadily declined. A declining retention rate implies that fewer users are returning month over month after rejoining. This leads to lower user engagement. How positively tragic! 😢

Therefore, this is the major problem that Ethereum has been facing. When these new investors enter the market, they seem to exit faster than they arrived. A real case of ‘in and out’!

At the same time, Exchange Netflow spiked to 88.2K—its highest in three weeks—signaling a surge in ETH deposits onto centralized platforms. Traders are aggressively exiting the market with more inflows than outflows. Quite the exodus!

Can ETH reclaim $2.8K?

For now, Ethereum trades just under $2,700. If short-term demand holds and net selling cools off, ETH could target $2.8K, followed by a delightful $3,000. But if retention continues to drop and exchange inflows persist, we may see ETH slide back toward $2,448. Oh, the suspense!

Read More

2025-05-23 23:07