Ethereum’s profitability profile has diverged sharply from previous market cycles. On-chain analytics firm Glassnode reported that the share of Ethereum supply holding 3x profits never exceeded 30% in the current cycle, compared to 50%+ during bullish phases in the prior two cycles.
The metric underscores compressed investor gains across the network. Currently, only 11% of Ethereum supply sits at 3x profit levels. The last time profitability was this constrained came in February 2017, according to Glassnode’s historical analysis.
“ETH’s profitability profile has fundamentally compressed relative to prior cycles,” Glassnode stated.
The 30-day MVRV Ratio, which tracks profitability of buyers from the last 30 days, reflects broader weakness. Bitcoin’s 30-day MVRV Ratio stands at -10%, while Ethereum’s sits at -12%, signaling that recent buyers are underwater across both networks.
Ethereum traded around $1,680 at the time of reporting, down from a $1,500 level during the weekend. The drawdown affected short-term investor profitability across the asset class.
The 2019 and 2022 bear markets never saw profitability metrics as low as current levels, according to Glassnode’s data. This compression suggests a structural shift in how supply has accumulated during the current cycle relative to prior bull runs.
Santiment, another on-chain analytics firm, offered perspective on what such conditions mean for market dynamics. “When the average trader is sitting on significant losses across networks that are normally hovering at 0% (zero sum game), selling pressure often becomes exhausted as weak hands capitulate and long-term investors begin accumulating,” Santiment noted.
The observation points to a potential inflection point. Extended periods of low profitability can signal capitulation, where retail investors exit positions and longer-term holders add to stakes. Whether Ethereum’s compressed profitability profile marks such a transition remains to be determined by subsequent price action and supply flows.
What the Metrics Measure
The 3x profit supply metric tracks the percentage of circulating Ethereum that purchased at prices one-third of current levels or lower. A rising share indicates more holders are in significant profit, typically associated with euphoric market phases. A declining or capped share suggests fewer holders have achieved substantial gains, constraining upside momentum.
The 30-day MVRV Ratio divides market value by realized value for coins moved in the past month. Negative readings indicate recent buyers are at a loss. Positive readings suggest recent activity is profitable. Both Bitcoin and Ethereum’s negative 30-day readings reflect the recent drawdown’s impact on fresh entrants.
