Ethereum Surges Above $2,000 as Retail Traders Dump in Panic After Pectra Upgrade

Ethereum has delivered a textbook example of why going against the retail herd can be profitable.

Ethereum price is trading above the $2,075 level for the first time in over six weeks as fear-driven retail traders capitulate on meme coins.

What Happened: On-chain analytics firm Santiment has noted that Ethereum broke through the crucial resistance level of $2,075, marking its highest point in six and a half weeks.

The fear-driven capitulation of retail traders, who had been dumping their ETH holdings and chasing meme coins following the Pectra upgrade disappointment, might have created an ideal buying opportunity.

According to Santiment’s analysis, Ethereum’s price tends to move contrarian to the retail crowd's expectations. Previous spikes in greed, such as those on February 16 and March 23, coincided with local price tops for the second-largest cryptocurrency.

Conversely, fear spikes, like the ones observed on April 6-8 and May 7, have consistently lined up with bottoming patterns and rebound opportunities for Ethereum.

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Why It's Important: As Ethereum reclaims its position above the $2,075 level, it becomes a market leader once again among large-cap assets, rewarding those who held the coin for the long term.

The cryptocurrency is also showing signs of a sustained recovery after a prolonged period of price stagnation and underperformance, which began in early December 2023.

The Pectra upgrade, which was supposed to bring significant changes to the Ethereum network, failed to generate the anticipated interest and hype, leading to a decline in retail trader activity.

However, with Ethereum breaking through the $2,075 resistance and showing signs of further gains, traders might be less inclined to abandon their ETH holdings and chase the latest meme coin trends.

This could create an opportunity for Ethereum to continue its recovery and potentially reach new all-time highs in the coming months.

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News data source: kdj.com

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