Is the Current Market Downturn the Bottom for Ethereum Holders?

Over 44% of Ethereum Investors are Currently at a Loss

New data from market intelligence platform IntoTheBlock reveals that a significant number of Ethereum investors are currently holding their coins at a loss. This indicates that the asset may be approaching its bottom. The data looks at the percentage of investors in profit, loss, and breaking even using the “Historical In/Out of the Money” indicator.

The indicator determines an investor’s profitability by analyzing their acquisition price compared to the current spot price. If the spot price is lower than the acquisition price, the investor is at a loss. Conversely, if the spot price is equal to or higher than the acquisition price, the investor is in profit or breaking even.

Trend in Ethereum’s Historical In/Out of the Money Indicator

The chart below illustrates the trend in Ethereum’s Historical In/Out of the Money indicator over the past few years:

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Currently, the indicator stands at 44.2%, indicating that nearly half of the Ethereum user base is holding their coins at a loss. Typically, when a majority of investors are in profit, they are more likely to sell and take profits. However, when a large percentage of holders are in losses, it can lead to price bottoms as profit sellers become exhausted.

Considering that the metric reached a similar value during the previous bear market, Ethereum may be nearing a bottom. If the percentage of losses reaches a similar level this time, we may expect further downward movement before enough investors drop underwater.

Ethereum Price Update

As of now, Ethereum is trading at around $1,600, showing a relatively flat movement in recent times.

Hot Take:

The high percentage of Ethereum investors currently at a loss suggests that the asset may be approaching a bottom. This could potentially lead to a reversal in its price trend. However, further downward movement may be expected before a recovery, as more investors experience losses. It will be interesting to see how Ethereum’s price develops in the coming weeks.