As a seasoned analyst with over two decades of experience in the financial markets, I have learned to read between the lines and interpret data in various ways. The recent revelation by IntoTheBlock that 61% of ETH holders are sitting in profits might seem like bullish news at first glance, but it’s essential to consider the broader context.
According to the blockchain analysis firm, IntoTheBlock, they’ve uncovered a fresh statistic indicating that approximately 61% of Ethereum (ETH) investors currently find themselves in a profitable position.
Currently, this cryptocurrency is being released when Ether (ETH) and other alternative coins are witnessing substantial drops in their prices. In fact, within just the last 24 hours, the second-largest digital currency has plummeted by more than 4%, causing its trading value to hover around $2,300.
61% of ETH Holders in Profit
According to IntoTheBlock’s analysis, we can see the second-largest cryptocurrency’s price history regarding investors’ profit or loss since 2016.
It’s been found that the percentage of ETH holders making a profit dropped to a minimum of 3% following the 2017 market cycle. This drastic reduction is usually associated with a substantial price drop, as many investors struggle to sell their ETH in order to realize any profits.
Moving on to the 2019-2020 period, Ethereum wallets saw their profits dip below 10% as bearish market conditions took over. However, during the 2021 bull run when Ethereum reached its highest value of $4,870, those who were invested saw their returns skyrocket to unprecedented levels at that time.
The graph indicates that the number of Ethereum wallets earning a profit dipped to about 46% during a market slump earlier this year. Now, with 61% of Ethereum holders being in profit, investors are less compelled to offload their Ether holdings. Consequently, this reduces selling pressure and contributes positively to the market’s overall health.
A Bearish September
This month has witnessed a significant decline for Ethereum (ETH), with its value dropping back under $2,300 again today – marking one of its poorest showings since February.
In a recent analysis, Matt Hougan, CEO of Bitwise, pointed out three primary factors contributing to the consistent downturn in the cryptocurrency market every September. One reason he cited was that digital assets like Bitcoin and other cryptos typically struggle during this month. Moreover, Hougan noted that investor expectations of poor crypto market performance in September often lead to the actual market behavior.
Despite the current downtrend, Hougan expressed conviction that Uptober (October) will bring the bulls, taking prices of assets like ETH to impressive heights.
A cause for concern among Ethereum optimists is the ETH/BTC exchange rate, which has plunged to its lowest point in nearly four years. Essentially, this indicates that Ethereum has been significantly lagging behind Bitcoin, the leading digital currency.
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2024-09-16 16:30