Ethereum (ETH), influenced by the upward momentum of Bitcoin, the world’s largest cryptocurrency, has executed an upward price movement, leaving the $3,300 level behind. According to data from CoinMarketCap, ETH has pleased its investors with an increase of more than 1.33% in the last 24 hours and over 12% on a weekly basis at the time of writing.
ETH Profitability Peaks
With the increase in price, most traders were continuing to make profits from their transactions. According to the famous blockchain analytics firm Santiment, the on-chain profit/loss ratio for Ethereum last week indicated the highest level in three months. It was noted that for every transaction incurring a loss on the network, there were approximately 2.3 transactions in a profitable position.
At the time of writing, the percentage of total supply in profit was over 93%. A similar level was last seen when the calendars were showing August 2021, and ETH was three months away from reaching its all-time high (ATH).
Furthermore, 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 ongoing rise in ETH price, investors should be cautious of a potential price correction.
While the total ETH supply on exchanges has been steadily decreasing since the beginning of 2024, the supply outside of exchanges has been increasing. Such situations can generally create the impression of 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 the Dencun Upgrade
On the other hand, ETH supporters seem confident of a long bull market with strong upward triggers expected in the coming days.
At the forefront of these triggers is the eagerly anticipated Dencun upgrade, which aims to reduce transaction fees on Layer-2 (L2) chains. According to a recent announcement by the Ethereum Foundation, the upgrade has been activated on all test networks to date, and work has begun for the mainnet launch scheduled for March 13th.
