On-chain data shows that profits made by investors on the Ethereum network have reached their highest level in three weeks alongside the decline in the price of ETH.
Ethereum posted recently rising profit/loss
According to data from on-chain analytics firm Santiment, the profit/loss made by the Ethereum network has recently observed a spike. This indicator tells us, as the name suggests, the net amount of profit or loss that ETH investors as a whole are making from their transactions.
The metric works by looking through the transfer history of each token sold on the blockchain to determine the price at which it was previously moved. If the value of the previous transaction was lower than the last sale price of a coin, then the sale of the token is considered to lead to the realization of a net profit. Likewise, the opposite situation indicates taking losses.
The exact degree of profit or loss involved in each case is equal to the difference between the two prices. The profit/loss realized on the network summarizes these profits and losses for all transactions occurring on the network and determines their net value.
Now here is the chart shared by Santiment which shows the trend of the Ethereum indicator over the past month:
As the chart above shows, the profit/loss made on the Ethereum network is mostly below zero within this window, a potential sign that investors selling on the blockchain have generally been the loss-making type.
There have, however, been some spikes in profit taking, including one recently. The chart shows that investors made a profit of $74.58 million alongside this rise.
Interestingly, the distribution does not align with the local high from earlier in the week. Instead, this happened after the cryptocurrency had already fallen. This means that some investors who were sitting on profits panicked at falling prices and simply decided to exit with some gains.
These holders could be the buyers of the depressed market phase from February to March, when Ethereum was trading below $2,000. As the analytics company explains:
Portfolios accumulated during these months are still profitable even with this mid-May drop, and many have decided to sell when they believe they still have the opportunity to make a profit.
Since the profits were made, Ethereum has seen another decline, a potential sign that this distribution may have played a role. It now remains to be seen whether the profit/loss made on the network will remain positive in the coming days or whether losses will then follow.
ETH Price
At the time of writing, Ethereum is floating around $2,250, down 2.6% over the past seven days.
