One More Metric Shows Ethereum Is Setting Stage for Another Price Rally

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Wed, 06/10/2020 - 07:40
Alex Dovbnya
The lion’s share of Ethereum’s total supply is in profit now that the second-largest cryptocurrency has fully recovered from the brutal March sell-off
Cover image via stock.adobe.com
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Close to 80 percent of Ethereum’s total supply is currently in profit, according to data provided by Glassnode.

It is worth noting that the coin hasn’t managed to surpass this level since it was trading at $700 more than two years ago. 

Related
More Than 40 Mln Addresses Now Hold Ethereum (ETH)

Third time a charm?

Ethereum has already attempted to breach the 80 percent threshold three times this year in 12 months. 

image by @glassnode

After the second-largest cryptocurrency came close in February, its holders had their hopes thwarted by the market collapse that happened the following month. 

The ETH price collapsed more than 55 percent in one day over the span of 24 hours on ‘Bloody Thursday’ of March 13. As a result, less than 20 percent of its holders were in profit (the lowest reading ever).

When the coin’s supply in profit dips below 50 percent, it usually indicates market bottoms. This has already proven to be the case on numerous occasions, with the pandemic-driven meltdown being the most salient example. 

Conversely, anything above 95 percent is a surefire sign of a market top. It is virtually impossible to remain unprofitable when an asset is moving closer to new highs.

Related
Ethereum Might End Up Outperforming Bitcoin, According to Raoul Pal

Bitcoin in the same boat

As reported by U.Today, 79 percent of Bitcoin’s supply was also in profit when Bitcoin was trading at the $9,500 level.

Given that a distinct bull market usually starts at around 90 percent, the top cryptocurrencies (as well as its main rival) have significantly more room for growth before they reach new peaks.

Bitcoin and Ethereum are currently down 50 percent and 83 percent from their respective all-time highs of nearly $20,000 and $1,440.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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