Ethereum: Should holders wait before selling ETH for profits

  • The percentage of ETH circulating supply in profit now sits at the highest level in 2021.
  • This has been fueled by the recent uptick in the coin’s price.

The percentage of Ethereum [ETH] circulating supply in profit has skyrocketed to its highest level since 2021, data from Glassnode has shown.

According to data from CoinMarketCap, the coin’s circulating supply is 120,181,204 ETH. At press time, 91.6% of this total, equivalent to 110,085,982 ETH, was in profit. 

Source: Glassnode

The rally in the percentage of ETH’s supply in profit is attributable to the recent surge in the coin’s price. The value rise comes on the heels of the Securities and Exchange Commission’s (SEC) recent approval of a Bitcoin ETF.

 Exchanging hands at $2,550, ETH’s value has risen by almost 10% since the ETF approval arrived on 10th January. 

While the rise in the number of coins held in profit is generally considered a bullish signal, the disparity in the trading strategies commonly adopted by ETH’s short and long-term holders might impact where the coin’s price might be headed next.

Some profit-takers, especially short-term traders, might be tempted to sell their ETH to lock in their gains. This could lead to temporary price dips if selling pressure outweighs buying.

On the other hand, long-term holders looking to gain more profit might be more inclined to hold their ETH, reducing the circulating supply and potentially contributing to price appreciation in the long term. 

ETH on a weekly chart

The ETH market assessed on a seven-day chart revealed that sentiment remained significantly bullish. The key momentum indicators observed were spotted at overbought highs, suggesting that buying activity outpaced coin sell-offs.

For example, ETH’s Relative Strength Index (RSI) was 70.98, while its Money Flow Index (MFI) was 84.65. Likewise, the coin’s Chaikin Money Flow (CMF) was 0.17 at press time, indicating steady capital inflow.

Confirming that the bulls had control of the weekly chart, ETH’s positive directional index (green) at 30.74 rested above its negative directional index (red) at 8.67. 

Source: TradingView

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With the coin’s Aroon Up Line (orange) spotted at 100%, the current bullish trend was strong.

When an asset’s Aroon Up line is close to 100, it indicates that the uptrend is strong and that the most recent high was reached relatively recently.