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Cryptocurrency analysis firm Santiment reported that over 80% of the current supply for three of the largest cryptocurrency projects by market value is in profit. This implies that there is strong selling pressure on the table.
Metrics Signal Alarm for Bitcoin, Ethereum, and XRP
The Total Supply in Profit metric offered by Santiment measures the percentage of coins/tokens currently in profit compared to the last time they were moved, and this profitability percentage is sometimes associated with price trends.
According to the latest data compiled by the crypto analysis firm, the supply of Bitcoin (BTC), Ethereum (ETH), and XRP (XRP) is 83%, 84%, and 81% in profit, respectively, surpassing their averages, which range between 55% and 75%. This indicates that these cryptocurrencies are in a high-risk profit zone.
Santiment noted that these cryptocurrencies last reached this level in March 2022, stating “Bitcoin (83%), Ethereum (84%), and XRP Ledger (81%) are at historically high-risk profit levels compared to their historical averages ranging from 55% to 75% since 2018.”
High Percentage of Supply in Profit Could Hinder Price Rises
On the other hand, Santiment mentioned that despite positive developments in the sector, including the approval of a spot Bitcoin exchange-traded fund (ETF) in the US, many cryptocurrencies’ prices could still rise. However, the firm emphasized that a lower percentage of supply in profit would be a more robust indicator of an uptrend for cryptocurrencies, noting:
The cryptocurrency market can definitely continue to rise due to ETFs and other positive news, but ideally, a great signal to watch for, indicating that long-term growth will continue, would be once again a drop below 75% of their supply in profit.
