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Ethereum May Be One Dip Away From Mass Losses—Data Warns
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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

Ethereum May Be One Dip Away From Mass Losses—Data Warns

Keshav Verma
Keshav Verma
3 weeks ago
2 mins read
Ethereum

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On-chain data shows a large portion of the Ethereum market cap was acquired near the current price, making ETH’s position potentially fragile.

$123 Billion In Ethereum Market Cap Sits Close To Cost Basis

As explained by the on-chain analytics firm Glassnode in a new post on X, the largest share of the Ethereum market cap is currently above the spot price by just 0 to 20%.

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The indicator of relevance here is the “Market Cap by Profit and Loss,” which tells us about how much of the ETH market cap has its cost basis sitting within what distance of the cryptocurrency’s price.

Formally, the market cap is defined as the total circulating supply of the asset multiplied by the latest spot value. As such, the market cap of a particular group of tokens would be just their number multiplied by the price.

The Market Cap by Profit and Loss refers to the last transaction price of these coins to determine whether the market cap held by them is in profit or loss right now. Naturally, the cost basis of the tokens being under the latest price suggests they are in profit, while the opposite case puts them in the loss category.

Now, here is the chart for the indicator shared by the analytics firm that shows the trend in its value for Ethereum over the past few months:

Ethereum Market Cap by Profit and Loss
The market cap contained within each level | Source: Glassnode on X

As displayed in the above graph, the largest share of the Ethereum market cap is currently contained within the 0 to 20% cohort. This group includes coins that currently have their value between 0 and 20% above their cost basis. Naturally, even the tokens on the higher end of the range wouldn’t be in that big a profit at the moment.

In total, about $123 billion of the ETH market cap, equivalent to almost 38%, falls under this category. Considering the delicate profit-loss balance that all this supply has, it’s possible that even an ordinary pullback could send a large number of tokens underwater. “Despite recent gains, ETH remains in a fragile position,” notes Glassnode.

In some other news, Ethereum has witnessed a buying push from the whales during the past month, as analyst Ali Martinez has pointed out in an X post.

Ethereum Whales
The data of the ETH supply held by the whales | Source: @ali_charts on X

“Whales” are defined as the investors carrying between 10,000 and 100,000 tokens of the cryptocurrency. From the chart, it’s apparent that the total Ethereum supply held by this cohort has registered a notable increase in the last few weeks.

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More specifically, the whales have added around 1 million ETH (worth around $2.7 billion at the current exchange rate) to their holdings in this period.

ETH Price

Ethereum observed a decline below the $2,500 level earlier, but it seems the coin has found a rebound as it’s back at $2,700.

Ethereum Price Chart
ETH’s price appears to have bounced back | Source: ETHUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, Glassnode.com, chart from TradingView.com
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Keshav Verma
Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
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The highest standards in reporting and publishing
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Strict editorial policy that focuses on accuracy, relevance, and impartiality

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