On-chain data shows that 90% of all Ethereum investors are now profiting following the asset’s price surge beyond $3,800.
Ethereum investors mostly in the green after ETF rally
According to market intelligence platform data In the blockETH’s latest rally led to a change in profitability of investors happened on the network.
To track holder profitability, the analytics company uses on-chain data to determine the average acquisition price or base cost of each address on the blockchain.
If this price is lower than the current spot value of the cryptocurrency for any address, then that particular investor is considered to be in profit, or “in the money,” as IntoTheBlock defines it.
On the other hand, the fact that the cost basis is lower than the price of the asset suggests that the address holds some net loss amount, such that its holder would be “out of the money.”
Naturally, if the average purchase price of the portfolio is equal to the spot price of the coin, then the investor would be considered to be just at break-even (“at the money”).
Now, here’s what the breakdown of Ethereum’s user base profitability looks like after the strong rally the asset enjoyed:
Looks like a large amount of investors are in the green at the moment | Source: IntoTheBlock on X
As can be seen above, 90% of the total addresses on the Ethereum network are holding on to their coins with an unrealized net gain following the sharp rise in the asset’s price.
Interestingly, 0% of wallets are also out of the money, meaning no one on the blockchain is in a loss anymore. However, 10% of investors are still breaking even.
Historically, holders of stocks in profit have been more likely to sell than those in losses. So, whenever the market sees a significant imbalance in favor of green investors, the chances of a liquidation the events were notable.
For this reason, cryptocurrency price peaks may become more likely at high breakeven ratio levels. Given that an overwhelming number of ETH investors are currently making gains, massive profit-taking could likely occur, which could hamper the current rally.
It should be noted, however, that during bull markets, the asset has typically been able to maintain high profits for investors for a period of time, as strong demand continues to flow in to absorb any profit-taking, before a summit does not occur.
That said, the likelihood of at least a temporary downturn may increase if profitability remains high for too long. It now remains to be seen how the price of Ethereum will evolve from here on and whether the hype around the price of Ethereum will evolve from here on. Spot ETF will be able to thwart any massive sell-off in the market.
ETH Price
With a rally of over 22% in the last 24 hours, Ethereum has managed to reach its highest levels in over two months as its price is now trading around $3,800.
The price of the coin seems to have observed some sharp bullish momentum in the past day | Source: ETHUSD on TradingView
Featured image by Bastian Riccardi on Unsplash.com, IntoTheBlock.com, chart by TradingView.com
