On-Chain data shows that 44.2% of all Ethereum investors are currently holding their coins at a loss, a sign that the asset may soon reach its lowest point.
The percentage of ETH holders in a loss has been steadily increasing in recent times, according to data from market intelligence platform IntoTheBlock. The relevant indicator here is the company’s “Historical In/Out-of-the-Money,” which gives us insight into the percentage of Ethereum investors in profits and losses, as well as those who have just reached breakeven.
The metric determines whether an investor is making a profit or loss by assessing the average price at which they acquired their coins based on their address history. If the current market price of the asset is naturally below an owner’s cost basis, that particular owner is holding their coins at a net profit.
Similarly, a cost basis that is equal to or below the market price would mean that the investor is holding their investment at breakeven or at a loss.
Here is a chart showing the trend of the Historical In/Out-of-the-Money indicator for Ethereum in recent years:
[Image: Ethereum Loss]The value of the metric seems to have increased in recent weeks | Source: IntoTheBlock on X
IntoTheBlock has only listed the data for Ethereum investors experiencing losses, as this number is currently of interest in the discussion. From this value, one can also deduce the combined percentage of investors who have reached breakeven and are making profits since the total percentage must sum up to 100%.
At the beginning of July, Ethereum holders in a loss stood at around 27%. However, as seen from the chart, the indicator has since experienced a significant increase due to the cryptocurrency’s price decline.
Today, the value of the indicator stands at 44.2%, meaning that almost half of Ethereum’s user base is holding their coins at a loss. Generally, the more profits investors make, the more likely they are to sell to cash in on those gains.
For this reason, corrections in the asset are more likely to occur when a majority of the market is making profits. However, a large percentage of holders experiencing losses can have the opposite effect on the price as it can lead to lows when profit sellers are exhausted.
Related reading: This could be the metric to watch in a Bitcoin rally: Santiment
Since the beginning of the bear market last year, the value of this metric has reached its highest point of 50%, indicating that exactly half of the investors were in losses back then. This value is not too far from the current value, suggesting that Ethereum may be on the verge of forming a bottom.
If a similar percentage of losses is reached this time, ETH would initially experience another downtrend, causing enough investors to be underwater.
