Ethereum, often hailed as the king of altcoins, has been underperforming compared to other large-cap cryptocurrencies like Solana and XRP in the current bull cycle. Recent on-chain data from analytics firm Santiment reveals that a significant portion of ETH investors are now underwater, largely due to the recent market downturn.
According to Santiment, the amount of Ethereum tokens in the red has been steadily increasing over the past few weeks. The two key metrics to consider are the “percent of total supply in profit” and “total supply in profit.” The former measures the percentage of ETH’s total supply being held at a price higher than the original purchase price, while the latter is calculated by adding all token amounts last transferred when the token’s price was lower than the current price.
Ethereum’s market capitalization has slumped by at least 36% since reaching a local high of $4,016 in mid-December. This price decline has led to a notable drop in the amount of ETH tokens in profit since their initial mining date. Data shows that the amount of Ethereum tokens in profit is currently around 97.7 million, the lowest value since November 4, 2024. Simultaneously, the ratio of the total ETH supply in profit stands at 65.5%, down from 97.5% in early December and marking the lowest value since October 2, 2024.
The current market sentiment towards Ethereum appears to be notoriously negative, with retail traders willingly dumping their tokens amidst a great deal of FUD (fear, uncertainty, and doubt). However, this situation may set the stage for surprise bounces once the crypto markets stabilize. When a relatively lesser percentage of a token’s supply is in profit, the market is likely dominated by resilient long-term holders. This suggests that most “weak hands” have exited their positions, reducing downward pressure and potentially paving the way for a rebound.
As of this writing, the price of ETH sits just above the $2,600 mark, reflecting a modest 2% increase in the past 24 hours. While the short-term outlook remains uncertain, the current market conditions may present an opportunity for patient investors who believe in Ethereum’s long-term potential. The upcoming Shanghai upgrade, which will enable staking withdrawals, could also serve as a catalyst for increased demand and price appreciation.
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Tags: Ethereum, ETH, Ethereum Price, On-chain Data, Market Sentiment
Source: https://bitcoinist.com/ethereum-supply-in-profit-reach-new-4-month-low/