How will Ethereum’s price perform for the rest of the year?
Ethereum’s price is up 19% year-to-date, however, it still trails behind its peers.
Even positive catalysts like the Ethereum ETF have struggled to spark a reaction. Since its launch, the investment vehicles have been mired in significant outflows, totaling over $440 million.
Despite a 25% rebound in recent weeks, Ethereum’s supply in profit has sunk to a yearly low, sparking concerns that the second-largest cryptocurrency may not be out of the woods yet.
Ethereum’s Supply in Profit Hits Yearly Low
Ethereum’s supply in profit indicator measures the proportion of the circulating supply that was purchased at a lower price than its current price, essentially tracking the number of coins in profit. As the price closes at a new all-time high, the indicator naturally approaches 100%.
Historically, periods where Ethereum’s total supply in profit exceeded 90% have typically coincided with market cycle tops.
However, this indicator often remains elevated for an extended period before the price ultimately reaches its peak. Notably, in 2017 and 2021, there were multiple instances where the indicator surpassed 90% before the eventual top.
Ethereum Supply in Profit | Credit: Valdrin Tahiri/Glassnode
Interestingly, as Ethereum’s price matures, its profit supply falls below 30% less frequently. This is because more holders exist from lower prices in previous market cycles, making it less likely for the indicator to drop below 30%.
For example, during the 2022 bottom, the indicator only fell to a low of 40%.
Recently, the indicator has shown a similar pattern to previous market cycles. In March, it increased above 90% twice before the ongoing price correction reached a low of 82.75%.
This move bears a striking resemblance to July 2017 and 2021, when Ethereum’s supply in profit dropped from above 90% to a low of 80% (marked by the black circles).
In both instances, this marked the final correction before the price surged to a new all-time high.
Has Ethereum Finally Bottomed?
The most likely Ethereum wave count suggests that ETH is correcting inside a long-term wave four (white) since the all-time high in Dec. 2021. The Aug. 5 bottom and ensuing 25% bounce marked the end of sub-wave C (black).
The price of Ethereum is nearly 50% below its all-time high, which is more compared to other large-cap cryptocurrencies such as Bitcoin (BTC), Solana (SOL), or BNB.
Ethereum’s weekly MACD reiterates how important the current movement is for Ethereum’s long-term trend since the indicator is at risk of falling into negative territory. In the previous market cycle, the decline below 0 (black icon) marked the start of the bear market.
Since this would likely entail the ETH price breaking down from the long-term triangle, it could mean that ETH has started a lengthy downtrend.
As of the time of writing, this seems unlikely.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
