In the current bull cycle, most major altcoins have had their moments to shine, with Solana and XRP among the top performers. However, Ethereum, the so-called "king of altcoins," has struggled to impress, underperforming over the past year.
Recent on-chain data reveals that a significant portion of ETH investors are now underwater, partly due to the broader market downturn. Here’s a breakdown of Ethereum’s supply in loss and its potential impact on price.
How Many ETH Tokens Are Profitable?
On February 8, renowned on-chain analytics firm Santiment shared a post on X (formerly Twitter), highlighting a steady increase in the number of Ethereum tokens in the red over recent weeks. Two key metrics were referenced:
- Percentage of Supply in Profit: Measures the proportion of ETH’s circulating supply currently held at a price higher than its acquisition cost.
- Total Supply in Profit: Calculates the absolute number of ETH tokens in profit based on their last movement price.
Santiment’s data shows that Ethereum’s market value has dropped at least 36% since its local peak of $4,016 in mid-December. Consequently, the percentage of ETH supply in profit has plummeted from 97.5% in early December to 65.5%—the lowest since October 2, 2023.
Key Takeaways from Santiment’s Analysis:
"Compared to other large-cap assets, crowd sentiment toward Ethereum (#2 by market cap) remains notably negative. With significant FUD and retail traders willing to offload their tokens, surprises could emerge once the crypto market stabilizes."
When a small percentage of supply remains profitable, long-term holders often dominate, reducing sell pressure and setting the stage for a potential rebound.
Ethereum Price Action
As of this writing, ETH is trading above $2,600, reflecting a 2%+ increase over the past 24 hours.
👉 Why Ethereum’s On-Chain Metrics Suggest a Coming Rally
FAQs
1. Why has Ethereum underperformed recently?
Ethereum’s price decline aligns with broader market trends, including macroeconomic uncertainty and reduced risk appetite in crypto.
2. What does "supply in profit" indicate?
A lower percentage suggests more holders are at a loss, which may signal capitulation before a price recovery.
3. Could Ethereum’s price rebound soon?
Historical patterns show that when supply in profit drops sharply, accumulation phases often follow, potentially leading to upward momentum.
👉 How to Spot Ethereum Buying Opportunities
Final Thoughts
While Ethereum’s short-term performance has been lackluster, its fundamentals remain strong. Monitoring on-chain metrics like supply in profit can provide early signals of market shifts.
Featured image sourced from TradingView, data from Santiment.