Bitcoin, Ethereum, and XRP Flash On-Chain Warning Signs
- Bitcoin, Ethereum, and XRP have been trading in a “high-risk zone.”
- The “Percent of Total Supply in Profit” metric has suggested a potential upcoming 0c56133c-239c-4e7c-bd10-8076948fa5d3 shift.
- The data hasn’t prophesied a crash, but the red flags are unmissable.
The three biggest cryptocurrencies – Bitcoin , Ethereum , and XRP – are currently flashing warning signs, according to data from on-chain analytics firm Santiment. The indicator raising eyebrows is the “Percent of Total Supply in Profit,” which tracks the percentage of a cryptocurrency’s circulating supply currently sitting in profit.
On-Chain Data Suggests Caution
With all three major coins exceeding their historical averages in this metric, concerns are mounting that a mass selloff could be on the horizon. Investors often take profits when their holdings are in the green, and with a large portion of the supply currently profitable, the temptation to sell may become irresistible.
Historically, Bitcoin, Ethereum, and XRP have averaged between 55% and 75% of their supply in profit. All three sit above this range, firmly within what Santiment defines as the “high-risk zone.”
While external factors like increased exposure from ETFs could still push prices higher in the short term, Santiment emphasizes that a drop below 75% supply in profit would be a “great signal,” indicating continued long-term growth.
Currently, 84% of Ethereum’s supply and 83% of Bitcoin’s are in the green , with XRP trailing slightly behind at 81%. Historically, these figures have often preceded significant selloffs, as investors holding profitable positions become more likely to cash out.
While this data doesn’t guarantee an imminent crash, it does raise a red flag for investors. With a large portion of each asset’s supply already in profit, the potential for a mass selloff is heightened. This is especially true if broader market conditions turn sour or negative news specific to any of the three cryptocurrencies emerges.
On the Flipside
- They posit that, as facilitated by ETFs, institutional interest might steer prices upward despite the elevated profit percentages.
- Not every instance of high-profit percentages has resulted in significant selloffs as the crypto market is influenced by multifaceted factors, making it challenging to predict a uniform outcome based on this metric.
Why This Matters
The current high levels of “Percent of Total Supply in Profit” suggest a heightened risk of price corrections for Bitcoin, Ethereum, and XRP. While not a definitive prediction of a downturn, this metric is a valuable indicator for investors to watch as they navigate the ever-volatile world of cryptocurrencies.
To learn more about the impact of Bitcoin ETFs facing a ban in Singapore and the eligibility concerns surrounding it, dive into the details here:
Bitcoin ETFs Banned in Singapore Over Eligibility Concerns
Curious about the Howey Test facing scrutiny as a judge challenges the SEC’s interpretation? Uncover the nuances in this insightful exploration:
Howey Test Faces Scrutiny as Judge Fights SEC Interpretation
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Orbiter Finance collaborates with the Ethereum Foundation and the University of California, Santa Barbara to enhance the security model of bridging p
Since its establishment in 2021, Orbiter has been deeply exploring security, aiming to become a reliable infrastructure in the cross-chain field.
OXTUSDT now launched for futures trading and trading bots
Bitget has launched OXTUSDT for futures trading with a maximum leverage of 25, along with support for futures trading bots, on November 25, 2024 (UTC+8). Welcome to try futures trading via our official website (www.bitget.com) or Bitget APP. OXTUSDT-M perpetual futures: Parameters Details Listing t
Bitget Spot Bot adds CHEEMS/USDT
We are pleased to announce that Bitget spot bot has now added: CHEEMS/USDT. Reference 1. Spot grid 2. Crash course on Spot Grid Disclaimer Despite high growth potential, cryptocurrencies still face high risks and volatility. You are strongly advised to do your own research as you invest at your own
UNHCR And Cardano Foundation Drop An NFT Series To Aid Refugees & Young Artists