- 61% of Ethereum holders remained in profit despite recent price declines, showing market resilience.
- Rising leverage and declining new addresses suggested potential market volatility ahead.
As a seasoned researcher who has witnessed numerous market cycles and fluctuations, I can confidently say that Ethereum [ETH] continues to surprise me with its resilience and the unwavering belief of its holders. Despite the recent price drop, an impressive 61% of ETH holders remain in profit, a stark contrast to the dismal 3% seen after the 2017 market cycle. This indicates that Ethereum’s long-term value is still strongly believed in by the community, which bodes well for its future prospects.
In the past few weeks, the price of Ethereum (ETH) has been moving lower, falling beneath significant support points.
Over the past month, this decline has resulted in a drop of over 10% in its worth, causing it to be currently traded at approximately $2,298, and it has even dipped 2% in value just this past week.
Despite this bearish movement, market analytics firm IntoTheBlock has provided some key insights into Ethereum and the state of its holders that may offer a more nuanced view of the asset’s current situation.
Ethereum holders: 61% in profit
Based on a recent study conducted by IntoTheBlock, approximately 6 out of every 10 Ethereum owners are still making a profit, even during this current market downturn.
According to IntoTheBlock, this number indicates a level of durability amongst Ethereum owners, which is more robust than during past market fluctuations.
Last year’s trends were compared with the present situation, revealing a striking difference. Specifically, it was observed that in this current downturn (bear market), the number of profitable investors fell to its lowest point at 46%.
After the 2017 market cycle, the percentage of addresses in profit fell to a mere 3%.
This indicated that the current cycle demonstrates a stronger belief in Ethereum’s long-term value.
According to IntoTheBlock, the resilience shown by Ethereum indicates growing trust among its holders, possibly signaling a stronger base for Ethereum, even in times of financial turmoil.
As reported by IntoTheBlock, the current scenario indicates that a future market downturn might not be as significant as it was during the 2019-2020 period, when the number of addresses making profits dipped below 10%.
On-chain data
To get a better grasp of Ethereum’s present standing in the market, it’s essential to delve into some of its significant on-chain metrics. A notable metric among these is the calculated leverage ratio.
As an analyst, I’ve observed a significant uptick in Ethereum’s estimated leverage ratio over the past few months, currently standing at approximately 0.355 at this very moment.
The estimated leverage ratio measures the degree of leverage used in the derivatives market, comparing the amount of Open Interest to the total amount of coins held on exchanges.
As a leveraged ratio rises, it could signal a rise in speculative actions among traders, implying they might be assuming higher risks.
As a seasoned investor with years of experience navigating volatile markets, I’ve learned that trends can have a significant impact on market dynamics, particularly when it comes to price volatility. I’ve seen firsthand how leveraged positions can amplify this volatility in both directions. When more traders take on leveraged positions, the likelihood of liquidations increases, which can intensify price movements. This experience has taught me that it’s crucial to carefully manage risk and stay informed about market trends to avoid getting caught up in excessive price swings.
Beyond just looking at the leverage ratio, the growth of new Ethereum wallets can also give us a sense of the network’s activity level and possibly indicate the broader market sentiment.
According to data from Glassnode, there’s been a significant decrease in the creation of new cryptocurrency wallets. Reaching over 126,000 on September 6th, the number has since plummeted to approximately 79,000.
As a researcher, observing a decline in the number of newly added nodes in a network might suggest waning engagement or enthusiasm among participants, potentially pointing towards a less optimistic outlook.
Read Ethereum’s [ETH] Price Prediction 2024–2025
A decrease in the number of new addresses could suggest that fewer new investors might be joining the market, which could possibly result in reduced demand or buying pressure.
A decrease in network activity might add to the persistent drop in Ethereum’s value, particularly when combined with an increasing borrowing rate.
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2024-09-17 17:12