Bitcoin (BTC) and altcoins took another hard hit over the weekend. Bitcoin fell to levels around $74,000, while Ethereum (ETH) dropped to $2,100.
While some investors see the recent decline as an opportunity, BitMine CEO Tom Lee also considered the sharp drop in Ethereum as an opportunity.
Tom Lee recently described Ethereum’s sharp decline as “a pullback driven by supply and demand and position factors rather than a breakdown in fundamental indicators.”
He added that the current level looks attractive from a medium- to long-term perspective.
Lee stated that the drop in ETH price occurred at a time when on-chain activity and fundamental indicators on the network continued to grow.
At this point, Lee stated that according to the data, the daily number of transactions on Ethereum reached an all-time high of 2.8 million on January 15th, and the number of active addresses is projected to rise to 1 million per day by 2026.
Comparing the data to other bear markets, Lee said, “I want to remind you that during the crypto winters of 2018 and 2022, Ethereum transaction activity and the number of active wallets also decreased along with the price. However, this is the complete opposite of what we have seen in Ethereum in the last 12 months. This indicates that the weakness in Ethereum’s price is due to external factors, not fundamental network factors.”
Lee pointed to two factors influencing Ethereum’s price: “The lingering effects of the large-scale liquidation operations last October, the fact that the leverage effect in derivatives markets has not yet returned, and the rise in prices of precious metals such as gold and silver, which is taking away risk appetite.”
With Ethereum’s price falling by more than 25% last week, from around $3,000 to $2,200, BitMine’s unrealized losses are approaching $7 billion. Despite this, Lee interpreted the pullback as an opportunity, stating, “The Ethereum price still doesn’t fully reflect its utility and value as future financial infrastructure.”
*This is not investment advice.
