- Tom Lee signaled that Ethereum could reach a price bottom this week based on blockchain valuation metrics and trading patterns to Bitcoin.
- Ethereum’s ratio to Bitcoin and assets locked on-chain are key indicators being monitored.
- BitMine Immersion Technologies holds about 3.56 million Ethereum, 192 Bitcoin, and more than $600 million in cash in its treasury.
- The broader crypto market is experiencing weakness following a major liquidation event in October, which is described as having a quantitative tightening effect.
Tom Lee, managing partner at Fundstrat and executive chairman of BitMine Immersion Technologies (BMNR), stated on Monday that Ethereum may be close to hitting its price bottom this week. He discussed valuation metrics and trading data as supporting evidence, highlighting the value of assets locked on the Ethereum blockchain and the long-term price ratio of Ethereum to Bitcoin.
According to Lee, Ethereum tends to find support when the value of assets locked on its network nears 50% of its market capitalization—a level that is currently being approached. He also pointed out that Ethereum’s current price ratio to Bitcoin is about 0.032, which is considerably below its average over the past eight years. Lee explained that a return to this trendline might imply a potential Ethereum price near $12,000. As quoted, “We’re getting this sort of intrinsic floor because of the value that assets locked onto the Ethereum blockchain.”
BitMine Immersion Technologies recently announced that its holdings, which include cryptocurrencies, cash, and other investments, total about $11.8 billion. The company holds 3.56 million Ethereum, 192 Bitcoin, a $37 million investment stake in Eightco Holdings, and $607 million in cash.
The crypto market has seen continued weakness since a major liquidation event on October 10, with retail sentiment remaining bearish as noted here. Lee attributed this market pressure to the impact of liquidity reduction, likening it to quantitative tightening, which, as he mentioned, can last multiple weeks and tends to suppress prices temporarily.
Ethereum recently traded at around $3,100, up about 1.2% in the last day, though still over 37% below its all-time high of more than $4,900 reached earlier this year.
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