According to crypto analytics firm Glassnode as of June 10, more than 80% of the Ether supply was in profit — leading to fears of a price drop.
Glassnode posted a chart showing that the percent of Ether (ETH) in profit had hit 80% for the third time in a year, commenting: “Last time the Ethereum's supply in profit was significantly above 80%, ETH was priced at around $700.” (The key word there is “significantly” as Ether hasn’t been around $700 for some time).
The percent of #ETH supply in profit is hovering at 80%.— glassnode (@glassnode) June 9, 2020
It is the third attempt within a year to break this level.
Last time the #Ethereum's supply in profit was significantly above 80%, $ETH was priced at around $700.
Live chart: https://t.co/BsX5avJV2X pic.twitter.com/QR82efHyqq
The graph shows what percentage of the ETH supply is currently valued higher than at the time it was last moved. When the metric neared the 100% mark on two other occasions in the past year, it was followed by a steep correction.
The firm clarified the data only covered Externally Owned Accounts (EOAs) and not wallet contracts.
Investors sell at high prices
Cointelegraph reported in May an ETH price between $250–$252 could be the first substantial indicator for bullish momentum, but having 80% or more of the supply in profit has historically been unsustainable.
Though the price of ETH rallied to $250 on June 10 as the metric rose above 80%, the second-ranked cryptocurrency has been on a downward trend since that time, falling 8.4% to $229 on June 11.
However the recent Bitcoin (BTC) volatility no doubt played a major role in the price of ETH going down in the past day or so. Sell-offs triggered an $800 drop in BTC nearly the same time ETH experienced a similar percentage drop.