Crypto Networks Have High-Risk Profit Levels, Says Santiment
Crypto analytics firm Santiment has revealed that three major crypto networks – Bitcoin (BTC), Ethereum (ETH), and XRP – have over 80% of their existing supplies in profit. This indicates that the prices of these cryptocurrencies are currently high-risk for investors.
Santiment measures the Total Supply in Profit metric to determine the percentage of coins in profit compared to their last movement, which can be correlated with price trends. Bitcoin, Ethereum, and XRP have 83%, 84%, and 81% of their supplies in profit, respectively, surpassing their historical averages ranging from 55% to 75%. The last time these assets reached such levels was in March 2022.
Positive Developments and Bullish Indicators
Santiment believes that cryptocurrency prices can still rise due to positive industry developments, such as the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the US. However, the firm suggests that a lower percentage of supplies in profit would be a bullish indicator for these crypto assets.
While ETF exposure and positive news can continue to drive crypto growth, Santiment states that a breach below 75% of supplies in profit would signal sustained long-term growth.
Hot Take: Crypto Networks at High-Risk Profit Levels
The latest data from Santiment reveals that Bitcoin, Ethereum, and XRP are currently sitting at high-risk profit levels, with over 80% of their supplies in profit. This means that investing in these cryptocurrencies carries a higher risk due to their elevated prices.
Although positive developments in the crypto industry, such as the potential approval of a Bitcoin ETF, may drive prices further up, Santiment suggests that a lower percentage of supplies in profit would be a more bullish indicator for these assets. Investors should keep a close eye on the percentage of supplies in profit as it can influence long-term growth prospects.
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