Five Years of Holding ETH and Still in the Red: What Went Wrong?

Ethereum is currently experiencing one of the most severe and prolonged downturns in its entire existence. For long-term holders who entered positions at any point over the past five years, the reality is sobering — virtually all of them are now sitting on net losses.

ETH prices have collapsed to levels last seen in early 2021, effectively wiping out gains accumulated through major milestones including the rollout of spot ETFs in the United States and several significant network upgrades. The second-largest cryptocurrency by market capitalization has failed to hold any of its key support zones, leaving investors who believed in its long-term narrative deeply underwater.

Analyst and trader Jesse Olson recently highlighted some alarming on-chain and chart-based data. According to Olson, the ETH monthly chart is on the verge of printing a lower low, with price firmly closing below critical monthly support levels. He also pointed out that eight out of the last ten monthly candles have closed in the red — a streak that underscores the relentless selling pressure the asset has been under.

Beyond the monthly chart structure, Ethereum has produced several historically unprecedented bearish signals. For the first time in its history, the 200-week simple moving average is sloping downward — a development that technical analysts consider deeply concerning for long-term trend health. Additionally, the price action has formed a double top pattern accompanied by a lower high, further reinforcing the bearish outlook.

What makes this situation particularly striking is that ETH has returned to early 2021 price levels despite the completion of the Merge upgrade, the introduction of spot ETFs, and a broader crypto bull cycle that lifted many other assets significantly.

Large-scale traders appear to be capitalizing on the weakness. Blockchain analytics account Onchain Lens reported that a whale wallet identified as '0xa6e' opened a fresh short position of 22,000 ETH with 25x leverage, valued at approximately $35 million — a clear signal that sophisticated market participants are betting on further downside.

Several compounding factors are driving Ethereum's ongoing decline. Spot ETFs, once celebrated as a catalyst for institutional adoption, have instead become a persistent source of selling pressure, recording consistent and substantial net outflows. Institutional appetite for ETH has cooled markedly.

The network's own scaling strategy has also backfired in terms of revenue. Following the Dencun upgrade, transaction fees on Ethereum's base layer dropped sharply, gutting Layer-1 income. Adding to the turbulence, the Ethereum Foundation is reportedly dealing with financial strain and a notable departure of key developers from its ecosystem.

Despite the grim landscape, not everyone is ready to give up on ETH. Tom Lee of Fundstrat, who also serves as chairman of ETH-focused firm Bitmine Technologies, has publicly urged holders to avoid panic selling, maintaining a constructive long-term view on the asset. Whether his optimism proves justified will depend heavily on Ethereum's ability to reverse the structural and sentiment-driven headwinds it currently faces.