Ethereum (ETH), influenced by the rising momentum of Bitcoin, the world’s largest cryptocurrency, has executed an upward price movement, leaving the $3,300 level behind. According to CoinMarketCap, at the time of writing, ETH has pleased its investors with an increase of more than 1.33% in 24 hours and over 12% on a weekly basis.
ETH Profitability Peaks
With the price increase, most traders continued to profit from their transactions. According to the famous blockchain analytics firm Santiment, the on-chain profit/loss ratio for Ethereum indicated the highest level in three months. It was noted that for every transaction incurring a loss on the network, approximately 2.3 transactions were in a profitable position.
At the time of writing, the percentage of the total supply in profit was over 93%. A similar level was last seen when the calendars showed August 2021, and ETH was three months away from reaching its all-time high (ATH).
Moreover, looking at the 30-day MVRV ratio, it was noteworthy that on average, all ETH holders were making gains of over 20% on their investments.
On the other hand, a closer look at the MVRV Long/Short Difference indicator showed that long-term investors were making higher profits compared to short-term investors. In this context, it could be possible that this investor group, known as diamond hands, might be expecting to surpass the pre-distribution ATH and beyond.
Despite the rising ETH price, investors should be cautious about a potential price correction they might encounter.
While the total ETH supply on exchanges has been steadily decreasing since the beginning of 2024, the supply outside has been increasing. Such situations can generally create the impression that there might be an increase in short-term selling pressure. These types of corrective movements in price could be a good time for investors to make purchases at the bottom.
Time for Dencun Upgrade
On the other hand, ETH supporters seem confident of a long bull market with strong upcoming growth triggers in the following days.
Among these growth triggers is the eagerly anticipated Dencun upgrade, which aims to reduce transaction fees on Layer-2 (L2) chains. The Ethereum Foundation recently announced that the upgrade has been activated on all test networks to date, and all preparations for the mainnet launch scheduled for March 13 have begun.
