Ethereum Holders In Profit Still At Relatively Low Level

On-chain data shows Ethereum has just 66% of its holders in profit despite the 21% rally the cryptocurrency has seen over the past week.

Ethereum has seen a significant price downturn in recent times. At one point, the coin crashed from highs of $3,400 to lows of $2,100 in a matter of days.

After the crash, the cryptocurrency has seen a recovery of over 21% from the lows to where it is trading today. However, despite the rally, on-chain data shows that just 66% of the holders are currently in profits.

Ethereum Holders Still Largely Underwater

As the second-largest cryptocurrency in the world, Ethereum has seen a lot of interest from investors throughout this year. The coin began 2022 trading at around the $3,700 mark.

However, a downturn that began in April saw the coin lose over 60% of its value to reach lows of $2,100 in September. In the past week, though, ETH has rallied by more than 21%.

On-chain data from IntoTheBlock shows that this price downturn has had a significant impact on the profitability ratio of holders on the network.

As can be seen from the chart below, only 66% of the investors are currently carrying gains from their respective cost basis, which is still quite low.

Chart showing how many investors are at a loss, at breakeven, or at a profit at different price ranges from IntoTheBlock

Another interesting observation from the chart is the large number of investors who bought between the $2,920 to $3,000 and 3,000 to $3,080 ranges.

Naturally, these investors would lose right now due to the asset’s spot price being below these ranges. Some holders like these who are at a loss look forward to the asset rising back to their cost basis to exit the market and get their money back. Such selling can provide resistance to the coin.

This selling is usually not of a scale that can impede Ethereum. Still, when many investors share their cost basis inside the same narrow range, the chances of a significant selloff rise. Thus, the aforementioned price ranges can obstruct ETH’s recovery should it proceed that far.

Another risk to any rally is profit-taking, but as just 66% of the investors are in profits right now, the risk of a selloff happening with this motive may not be high, especially given that the coin may have already washed out a lot of weak hands during the crash.

ETH Price Analysis

At the time of writing, ETH is trading at around $2,700, up more than 2% over the past 24 hours. The cryptocurrency has seen a strong recovery from the lows of the past week, but it still faces some resistance from the upper-$2,000s to the lower-$3,000s price ranges.

If the coin can manage to breach these levels, it could be setting up for a return to the highs that were last seen in August before the الكبير حدث. From a technical standpoint, Ethereum has just seen a Tom Demark (TD) Sequential sell signal on its hourly chart.

Given this signal, it’s possible that ETH could end up witnessing a decline, although its scale may not be anything too large considering the short timeframe of the chart.