Ethereum spent much of December under pressure,Some are under $3,000. It left a visible mark on investor positioning.
On-chain data currently shows a noticeable deterioration in network-wide profitability, with ETH supply as a percentage of profits below 60%. at the same time, Institutional investor demand has decreasedGlassnode data shows how retail profitability and institutional participation in Ethereum are weakening at the same time.
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Ethereum’s supply margin falls below 60%
Ethereum’s supply rate decline in profits is one of the most obvious Stress signals for Ethereum. Ethereum investors are in for even bigger losses, which reflects recent price movements.
Speaking of price trends, Ethereum had regained its initial $3,000 price level on December 22nd. During this period, the share of ETH supply in profits exceeded 60% and reached 63%. However, this break was very short-lived, with the price moving below $3,000 after just a few hours.
As ETH fell back below $3,000, the percentage of supply held in unrealized gains fell from over 70% at the beginning of December to less than 60%. This fall shows that the pullback is not limited to recent buyers and is starting to affect investors who put money aside at the beginning of the month.
ETH profit supply rate. Source: Glassnode
ETF net outflows indicate decline in participation by institutional investors
Weak on-chain profitability and price trends also reflect trends in the ETF market. Another data metric from Glassnode It shows that since In early November, the 30-day moving average of net inflows into the U.S. Spot Ethereum ETF turned negative and remained there. The persistence of this capital outflow indicates a stage in which institutional traders’ participation and withdrawal are being restrained.
The ETF chart below shows that the inflows that helped propel Ethereum to all-time highs in August are fading. Instead, the outflow continues. From November to December. This is important for price action as ETF demand has been the main source of incremental purchases. As this bid weakens, Ethereum has struggled to absorb seller-side pressure, which has contributed to its inability to sustain above $3,000.
ETH: US Spot ETF Net Flow. Source: Glassnode
The combination of negative ETF net flows and Ethereum’s recent price movement helps explain the increase in unrealized losses. Interestingly, Various on-chain data sources We also uncovered various examples of whale addresses that reduce exposure to Ethereum outside of spot ETFs.
For example, recently Lookonchain Highlighted activity from wallet The incident is believed to be related to Eric Voorhees, who had been inactive for about nine years, converting 4,619 ETH worth about $13.42 million into Bitcoin Cash (BCH) over the past two weeks. Voorhees then answered clearly The wallet doesn’t belong to him, and he doesn’t have any Bitcoin Cash in it.
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Lookonchain also pointed out due to selling pressure from BitMEX co-founder Arthur Hayes offloaded a total of 1,871 ETH over the past week for approximately $5.53 million.
Featured image from Unsplash, chart from TradingView
