On-chain analytics firm Glassnode has revealed how the latest Ethereum cycle never reached a break-even point achieved in previous bull runs.
Ethereum has seen its profitability profile compress this cycle
In a new article on Below is the chart shared by the analytics company that shows the trend of this metric.
The value of the indicator seems to have gone down over the last few years | Source: Glassnode on X
From the chart, it is visible that the supply of Ethereum with 3x profit has recently decreased and reached the 11% mark. This suggests that just over a tenth of the circulating cryptocurrency supply represents a significant gain at the current spot price.
The reason this supply is low is naturally partly due to bearish market conditions. However, this alone cannot explain how low the indicator is. It can be seen from the chart that the last time the network saw this offering occupy a lower share was in February 2017. The bear markets of 2019 and 2022 have never seen such poor profitability.
In fact, it’s not just bear market levels that have varied during the current cycle. In the previous two cycles, the 3x profit offer crossed the 50% level during the bull phase. This cycle has never seen the metric cross the 30% mark, let alone approach the 50% threshold. “ETH’s profitability profile has fundamentally compressed compared to previous cycles,” Glassnode noted.
On a related note, Ethereum and other assets have recently faced a sharp decline, which has had a notable effect on investors’ short-term profitability. On-chain analytics company Santiment shared in an article X the data relating to the comparison of different leading coins in this regard.
The metric cited by Santiment is the market value to realized value ratio (MVRV), which is a popular metric for assessing the profit loss status of overall holders. Here, the analytics company specifically used the version of the MVRV ratio that tracks buyer profitability over the past 30 days.
The trend in the 30-day MVRV Ratio for BTC, ETH, ADA, XRP, and LINK | Source: Santiment on X
As the chart above shows, Ethereum, Bitcoin, and other assets saw the 30-day MVRV ratio drop to a significant value as the stock market crash unfolded. With the rebound that has since followed, however, the situation has improved a little for buyers compared to last month.
That said, losses remain significant for this group. The 30-day MVRV ratio currently stands at -10% for BTC and -12% for ETH. The analytics company explained:
When the average trader experiences significant losses on networks that normally hover at 0% (zero-sum game), selling pressure often exhausts as weak hands capitulate and long-term investors begin to accumulate.
ETH Price
Ethereum had fallen near the $1,500 level over the weekend, but the coin has since rebounded as its value now sits around $1,680.
Looks like the price of the coin has bounced back a bit | Source: ETHUSDT on TradingView
Featured image of Dall-E, chart from TradingView.com
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