- 61% of Ethereum holders remain in profit despite the recent price drops, showcasing the market’s resilience.
- Increasing leverage and a reduction in new addresses suggest potential upcoming market volatility.
In recent weeks, Ethereum (ETH) has experienced a downward trend, falling below key price levels. Despite these declines, an interesting market observation has come into focus: 61% of Ethereum holders are still in profit. But what does this mean for ETH?
The cryptocurrency saw a more than 10% decrease in value over the past month, with the current trading price around $2,298, reflecting a 2% drop in the last week alone.
Despite the bearish movement, insights from market analytics firm IntoTheBlock offer a more nuanced view of Ethereum’s current state. For instance, a significant 61% of Ethereum holders are actually profiting in the current scenario.
Ethereum Holders: 61% Still in Profit
According to IntoTheBlock’s analysis, 61% of Ethereum holders remain in profit despite the ongoing market downturn. This figure signifies resilience among Ethereum holders, contrasting previous market cycles.
The analytics firm noted that during the recent bear market, the profitable holder percentage dropped to a low of 46%. Comparatively, after the 2017 market cycle, the percentage of addresses in profit fell to just 3%.
Source: IntoTheBlock
The current cycle appears to demonstrate a stronger belief in Ethereum’s long-term value. IntoTheBlock states that this resilience hints at increased confidence among holders, suggesting a more robust foundation for Ethereum even during volatile periods.
In contrast to the 2019-2020 period, where profit-making addresses fell below 10%, the present situation suggests that any potential downturn may be less severe.
Ethereum’s On-Chain Data Insights
To better gauge Ethereum’s market position, key on-chain datasets such as the estimated leverage ratio offer valuable insights.
According to CryptoQuant, the estimated leverage ratio for Ethereum has seen a noticeable rise in recent months, currently sitting at 0.355.
Source: IntoTheBlock
The estimated leverage ratio measures how much leverage is used in the derivatives market, comparing Open Interest to the total coins held on exchanges. A rising leverage ratio often indicates increased speculative activity, implying that traders might be taking on more risk. This can lead to higher price volatility, as more leveraged positions increase the likelihood of liquidations, further impacting price movements.
Another crucial metric is the count of new Ethereum addresses, which provides insight into network activity and market sentiment. Data from Glassnode showed a significant drop in new addresses, with the figure dropping from a peak of over 126,000 on the 6th of September to around 79,000 new addresses recently.
Source: Glassnode
A drop in new addresses typically signals reduced participation or interest in the network, often a bearish indicator. The lower growth in new addresses may imply fewer new investors, potentially reducing buying pressure.
Read Ethereum’s [ETH] Price Prediction 2024–2025
In conclusion, the combination of reduced new addresses and rising leverage ratio could contribute to the ongoing downward pressure on Ethereum’s price. However, the resilience of current holders in profit might suggest a foundation for potential recovery.
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