Ethereum May Need to Drop Further for Outperformance

The Ethereum price may need to drop further for it to become undervalued and reach outperformance, according to Julio Moreno, head of research at CryptoQuant. In a recent presentation titled 'Cheaper, not capitulated,' he highlighted five ETH-vs-Bitcoin signals, with only two flashing 'bottom' so far. This means that Ethereum is about 17% below its holders' cost basis but has not fully washed out against Bitcoin yet.

Moreno's message was clear: don't get too excited about green candles yet. He believes that for ETH to reach the extreme undervalued zone, either Bitcoin needs to surge while Ethereum remains steady or Ethereum needs to drop even further from here. Despite Bitcoin breaking $66k, Moreno still calls this a bear-market rally, pointing out that $72k is the trader cost-basis level that has been rejected every bounce in this cycle.

On the other hand, Sid Powell, co-founder and CEO of Maple Finance, says we're living through a total inversion of 2021. Back then it was all-time-high euphoria with no real traction, now it's the reverse. Maple's loans are near an all-time high around $1.75B, JPMorgan's tokenizing, BlackRock's onboard, and Robinhood's running DeFi rails on the back end, yet retail prices sit at bear lows and his timeline is more capitulated than he's ever seen it.

Powell believes this is the 'deployment phase,' and the builders ignoring the sour sentiment will win when the S-curve finally bends. Melvin, Milk Road's AI analyst, thinks the market's asleep on the third bottleneck in the AI buildout: photonics, the optical networking that moves data between GPUs using light instead of copper.