Key Points
Ethereum’s Bullish Momentum
Ethereum [ETH] has recently surpassed the $3,300 mark. The world’s second-largest cryptocurrency continues to be propelled upwards by bullish momentum. As per CoinMarketCap, ETH had risen by 2.61% over 24 hours, and more than 12% over the week.
The price surge has led to most traders making profits on their transactions. Blockchain analytics firm Santiment reports that Ethereum’s on-chain profit/loss ratio in the last week reached a three-month high. For every transfer on the network that resulted in a loss, approximately 2.3 transfers were profitable.
As of now, over 93% of the total supply is in profit. This level, on a rising curve, was last seen in August 2021, three months before ETH hit all-time highs. On average, all ETH holders were realizing gains of over 20% on their investments, as indicated by the 30-day MVRV Ratio. The higher the ratio, the more likely traders have historically shown a willingness to sell.
A study of the MVRV Long/Short Difference indicator suggests that long-term holders were realizing higher profits than short-term holders. Consequently, it is highly probable that these “diamond hands” would wait for prices to reach all-time highs and beyond before distribution.
Despite Ethereum’s bullish momentum, potential corrections should not be overlooked. The total amount of ETH on exchanges has been steadily increasing since the beginning of 2024, while the supply outside has plateaued. This is typically seen as a rise in short-term selling pressure. Such corrections could present an opportunity to buy the dip.
ETH supporters remain confident of an extended bull market due to strong bullish catalysts. One such catalyst is the highly anticipated Dencun Upgrade, which aims to reduce transaction fees on layer-2 (L2) chains. According to a recent blog post by the Ethereum Foundation, the upgrade has been activated on all testnets and is scheduled for mainnet launch on 13th March.
