Is Ethereum on the Verge of Collapse? Only 61% of Holders Are Still in Profit!

• Only 61% of Ethereum holders are in profit after the recent market drop, signaling potential sell-offs.
• The “In/Out of the Money” indicator reveals the proportion of investors in profit, loss, or break-even.

Recent data from IntoTheBlock reveals that only 61% of Ethereum holders remain in profit after the latest market downturn. This represents a notable decline compared to earlier in the year, when over 90% of Ethereum addresses were profitable during a price rally. 

The metric used to assess this profitability is known as the “Historical In/Out of the Money,” which examines the acquisition price of Ethereum for each wallet and compares it to the current market price.

61% of Ether holders are currently in profit.

During the recent bear market, the percentage of profitable holders dropped to a low of 46%, while after the 2017 cycle, it fell to just 3%.

This comparison reveals two key insights:

Increased Resilience: Ethereum's current… pic.twitter.com/GqfIA7tgAi

— IntoTheBlock (@intotheblock) September 16, 2024

Addresses where the acquisition price is lower than the current price are considered “in the money” or profitable. On the contrary, those holding Ethereum at a higher cost than the current market price are labeled “out of the money.” Meanwhile, wallets holding Ethereum at a break-even point, with acquisition and current prices equal, are categorized as “at the money.”

Historically, when a large percentage of holders are in profit, it increases the likelihood of sell-offs, as investors may decide to cash out. This behavior often coincides with market tops. Conversely, market bottoms tend to occur when more holders are at a loss, with profit sellers already exhausted.

The current drop to 61% profit holders could be indicative of a broader market trend. In the 2022 bear market, the “in the money” metric bottomed at 46%, while the 2018 bear market saw a dramatic low of just 3%. 

These figures highlight how Ethereum has previously reacted to bearish conditions. The data suggests that further declines in profitability could signal an eventual market recovery, as witnessed in previous cycles.

Given Ethereum’s historical patterns, monitoring this metric can provide insights into future price movements, especially during volatile periods like the current one. Whether Ethereum’s recent profitability drop will lead to a market bottom remains to be seen, but the data points to similar trends from past bear markets.

The current price of Ethereum (ETH) is $2,340.92, showing a 1.95% increase. The day’s range for ETH is between $2,264.29 and $2,388.63. Over the past 52 weeks, ETH has fluctuated between $1,523.24 and $4,092.28, indicating significant volatility.

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