On-chain data shows that investors’ realized profits on the Ethereum network have reached a three-week high, alongside the drop in ETH price.
Ethereum recently realized gains/losses
This is evident from data from an analysis company in the chain SantimentEthereum Network realized profit/loss has recently seen a spike. This indicator, as the name suggests, tells us the net amount of profit or loss that ETH investors as a whole realize through their trades.
The metric works by going through the transfer history of each token sold on the blockchain to determine the price at which it was previously moved. If the previous transaction value was lower than the last sale price for a coin, the sale of the token is considered to result in realizing some net profit. Likewise, the opposite scheme indicates taking losses.
The exact amount of profit or loss involved in each case is equal to the difference between the two prices. The Network Realized Profit/Loss sums up these profits and losses for all transactions taking place on the network and determines their net value.
Here is the chart shared by Santiment showing the trend in the indicator for Ethereum over the past month:
As shown in the chart above, the Ethereum network’s realized profit/loss within this window has mostly been below zero, a potential sign that investors selling on the blockchain have generally been loss-making.
However, there have been some spikes in profit taking, with one recently appearing. The chart shows that in addition to this increase, investors made $74.58 million in profits.
Interestingly, the distribution did not match the local high from earlier in the week. Instead, it came after the cryptocurrency had already fallen. This means that some investors who were sitting on profits panicked at the price drop and decided to exit the market with some profit.
These holders could be the buyers from the depressed market phase of February-March when Ethereum was trading below $2,000. As the analytics company explained:
The portfolios built up in those months are still making profits even with this drop in mid-May, and many have decided to sell while thinking they still have the opportunity to enjoy profits.
Since the profit realization occurred, Ethereum has witnessed a further decline, a possible sign that this distribution may have contributed. It now remains to be seen whether the Network Realized Profit/Loss will remain positive in the coming days or whether losses will follow.
ETH price
At the time of writing, Ethereum is hovering around $2,250, down 2.6% in the past seven days.