Ethereum’s Profit Party: Holder Growth Slows While Profits Skyrocket – What’s the Next Move?

Ethereum's hodlers are cashing in—but new buyers are hitting the brakes. The network's profit metrics scream bullish, yet accumulation rates whisper caution. Here's why ETH's next act could defy expectations.

The Profit Surge: A Double-Edged Sword?

With over 85% of ETH holders now in the green, the champagne corks are popping. But veteran traders know: extreme profit-taking often precedes volatility. Remember 2021? Exactly.

The Accumulation Slowdown: Smart Money or Cold Feet?

Whale wallets aren't filling as fast—and retail's playing wait-and-see. Some call it consolidation; others spy institutional jitters before the SEC's next 'how to crypto' webinar.

The DeFi Factor: Ethereum's Ace in the Hole

While traders obsess over price, developers keep shipping. TVL across L2s just hit another ATH—because nothing says 'long-term play' like paying $3 gas fees instead of $30.

The Bottom Line

ETH's fundamentals scream 'hold,' but the charts hint at turbulence ahead. One thing's certain: when Wall Street's algo-traders finally 'get' staking yields, the FOMO will make 2021 look tame. Just maybe wait for the dip—unless you enjoy buying high and selling low like a true finance professional.

Key Takeaways

The high percentage of holders in profit might also hurt Ethereum’s rally, but one crucial aspect overshadows these developments.

Over the weekend, ethereum [ETH] has risen by 4.09%. The leading altcoin managed to defend the $3,700 support level and has also succeeded in climbing above the $3,860 local high from the 21st of July.

Source: ETH/USDT on TradingView

The price MOVE above last week’s high also marked a breakout past a short-term range. The trading volume has not been high, which hints that the breakout might not have the legs to climb higher.

The CMF agreed with the lack of strong buying pressure over the past couple of days, with a reading of 0.0. The MACD underlined the bullish momentum behind the breakout. The next resistance level is at $4.1k.

On-chain metrics showed that a high percentage of holders were in profit, and the holder accumulation ratio saw a slight drop in recent days. Could this mean that the market is overextended and in need of a reset?

Ethereum might have more gas in the tank

Source: Glassnode

The holder accumulation ratio measures the proportion of active holders who are increasing their positions. Ratios above 50% are a bullish signal, showing accumulation behavior among holders.

It saw an uptrend from May to early July, but has fallen slightly over the past week. Moreover, the ratio was not above 50%.

It hinted that network accumulation might not be fueling the Ethereum rally in recent weeks.

Source: Glassnode

AMBCrypto found that the percentage of supply in profit was at 98.1%. ETH tends to make a local high when this metric goes past 95%. It did so in March, June, and December 2024.

If the trend continues, ETH might be headed for another pullback.

The evidence in favor of ETH

On the other hand, the 2020-2021 bull run saw the percent supply in profit stay above 95% for the most part from November 2020 to May 2021.

If this historical precedent is repeated, Ethereum might have another six months to trend higher.

The ETF netflows have been positive for nearly every trading day in July. The $452 million inflows on the 25th of July marked the 16th consecutive day when ETH spot ETFs had positive netflows.

The run began on the 3rd of July, according to data from Farside.

Combined with the growth of Ethereum treasury companies and their stock performances, it appeared likely that high institutional demand WOULD fuel ETH’s rally.

Hence, the dip in holder accumulation ratio and the high percent supply in profit might not hurt the altcoin’s strongly bullish outlook for the coming months.