The relentless bear market in crypto over the past few months has taken a serious toll on the price and profitability of ETH. The price of Ethereum has been stuck in a sideways range lately and many ETH holders have been unlucky with it. According to data from Glassnode, the percentage of Ethereum addresses turning a profit has now dropped to its lowest point in 5 months.
Percentage of addresses in green drops to 55.414%
In 2021, when the price of ETH was at its highest, most addresses were comfortably positioned. Now, two years later, new investors who bought at higher prices have had to wait a long time for their positions to turn green again.
Glassnode, a crypto analytics platform, reports that the percentage of Ethereum addresses in the green when measured over a 7-day moving average is now at a 5-month low of 55.414%.
Percentage of addresses in profit drop to five-month low | Source: Glassnode on Twitter
This indicates that more than 44 percent of people who own ETH are currently experiencing losses. In the same vein, it has number of profitable addresses dropped to the lowest since March this year, currently at 56,311,171,899.
Remove ETH from exchanges
The amount of ETH held on cryptocurrency exchanges has also fallen to the lowest level in more than 5 years. This means there is less ETH available for trading on exchanges, which can affect price and liquidity. Traders take their ETH from exchanges and hold it in private digital wallets.
The drop may also be linked to an all-time high level of staking in the ETH 2.0 deposit contract. Data shows that the majority of ETH held by major investors are now moving ETH into the contract, showing that interest in ETH staking is growing. This dwindling supply, coupled with increasing interest in ETH, could push the price higher if demand remains strong.
Ethereum dips below USD 1,700
Meanwhile, Ethereum broke below critical price support earlier this week. The price dipped below $1,700 yesterday to $1,630, marking its lowest value since March 16. The plunge in price and profitability has been largely attributed to the negative sentiment surrounding mounting inflation fears and overall weakness in the crypto market recently.
ETH has since recovered and is now trading at USD 1,720, retesting the USD 1,800 resistance. Of course, if $1,700 is not held, Ethereum could drop further to test support at $1,400 or even $1,300. A drop below $1,700 would be very bearish and would further push the profitability rate down.
Ethereum price recovers above $1,700 | Source: ETHUSD on TradingView.com
Featured image from The Cryptoknowmist, chart from TradingView.com