Where Does Ethereum Stand After The Recent 50% Price Pullback?

After making an all-time high of $4,847.57 on 10 November, the king altcoin’s price trajectory has largely been on a steep decline for almost two months now.

Since January 27, Ethereum’s price seems to have picked up on the back of larger market gains, but where Ethereum would be headed in the days to come still remains a matter of debate. 

Recovering From One of the Largest Drawdowns

Ethereum’s price fell to as low as $2170 on January 24, visiting the under $2200 level after 30 July 2021. The over 50% fall from ETH’s November ATH was the 7th Ethereum price fall of over 50% since the altcoin’s inception, making the December-January dip a major dip in ETH history. 

That said, the ETH market cap suffered a loss of over $280 billion making it one of the largest dips in its market cap.

Interestingly, data from Arcane Research highlighted that a 50% drop in ETH’s price from ATH on average takes around 38 days. However, the most recent price drawdown was comparatively painful and rather long as it panned out over a course of 75 days. 

Furthermore, an ETH recovery is a relatively long process taking around 165 days on average to recover from the cycle low. The 2018 ‘crypto winter’ however, was the longest time ETH took to surpass its previous ATH, which amounted to three full years.

In 2018, ETH’s price fell by over 94% from its previous ATH. Thus in relative terms, if the $2200 mark is considered a cycle bottom, the recent dip isn’t as bad compared to the 2018 fall in prices. 

So, Where is ETH Headed?

At the time of writing, a close look at ETH’s daily chart presented that the top altcoin was attempting a recovery. Ethereum was up by almost 20% in the last week, making higher highs and higher lows since then.

Furthermore, most on-chain metrics for ETH presented a decent picture for the altcoin. Data from IntoTheBlock highlighted that a total of 302,092 ETH have left centralized exchanges in January amid the recent price drawdown.

The recent drawdown has increased the outflows from exchanges, at the same time as more ETH continues to burn, maintaining a positive narrative for the coin. Ethereum burnt since the EIP-1559 protocol stands at 1.72 million which amounts to $4.75 billion to date.

However, Ethereum and Bitcoin data suggested that the total adjusted on-chain volume decreased by 20.3% to $626 billion.

1/14 January summary 🧵

Most metrics continued to decline.

Total adjusted on-chain volume decreased by 20.3% to $626B: pic.twitter.com/AIrzOyHMLl

— Lars (@lars0x) February 1, 2022

At press time with the global crypto market cap falling to $1.66 trillion noting, a 6.96% decrease over the last day, ETH and BTC’s short-term trajectory raised skepticism. Nonetheless, in the near term if ETH’s price establishes above the $3000 mark a recovery could be confirmed.