The on-chain metrics show long-term Ethereum holders are in significant profits, despite the market free falling to $2100. Even if the price drops down below $1000, more than 75% of the total addresses would still be in profit. The reason being- they have accumulated ETH at lower price levels that are closer to $600-800$. The global in/out of the money (on chain data) shows us that more than 10 million addresses acquired Ethereum at an average price of $141, and more than 50 million holders are in profit.
Eighty five percent of the total active addresses remain in profits, and around two percent of them break even, so only nine percent of ETH holders are in losses. The profit-taking levels for holders are significantly higher for ETH, and most of them stay unaffected when the market experiences extreme volatility.
The rise of Defi has facilitated Ethereum holders to earn decent interest on their ETH by staking them with the help of many layer 2 protocols. As of 28th May, the total value locked under deposit contracts stands at around $14 billion, and more than 5 million ETH are staked. This number is nearly 23% of the total Ethereum supply, and it is mainly due to high gas fees, and the rise in popularity of NFTs and Defi.
Staking is becoming a lucrative service for cryptocurrency exchanges, and it is giving better returns than simply holding the asset. It has been recorded that stakers are roughly earning anywhere between 4% and 34% in one quarter, so people who bought ETH for less than $800 are opting to stake and earn more yield.
The on-chain metric justifies this by showing minimal volume change in the addresses of long-term holders. In 30 days, we have observed only a 0.82% change in volume to the downside, and an additional 2.15% got added to the total LTH addresses.
When we compare the on-chain metrics of Ethereum and other altcoins like Cardano, we still see a higher percentage of addresses being in profit. With the market losing its value, people are gaining more confidence in assets like Ethereum and Bitcoin, so many of them are still accumulating at these lower prices. With most of the supply locket in staking pools, ETH holders are no longer worrying about the daily price fluctuations.Once the price reaches its previous all-time high, we will see most of the addresses turning green after making significant profits.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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