40% of Circulating ETH Now at a Loss — What Traders Need to Know
On-chain data from Glassnode shows roughly 40% of circulating Ethereum (ETH) is now held at a loss, down from about 25%–30% profit share earlier this month. The drop reflects recent ETH price weakness — current price around $2,970 — and concentrated losses among medium-term holders who bought near recent peaks. Key drivers include a broader crypto market correction, reduced institutional buying, network activity fluctuations affecting fee revenue, and macroeconomic uncertainty. Historical context: prior bear markets pushed loss shares above 60%, while recovery phases have previously begun when 30–40% of supply was at a loss. For traders, the report signals elevated selling pressure but not extreme capitulation; actionable considerations include monitoring price support near current levels, tracking on-chain metrics (supply in profit/loss, active addresses, transaction volume), watching institutional flows and regulatory news, and using risk management techniques such as position sizing and dollar-cost averaging. Overall, the indicator can mark either a capitulation or accumulation phase depending on whether selling accelerates or stabilizes; short-term impact is likely increased volatility and potential downward pressure, while long-term implications depend on network fundamentals and institutional demand resumption.
Bearish
A sudden rise to 40% of circulating ETH held at a loss signals increased unrealized losses concentrated among medium-term holders and heightens the likelihood of selling pressure. Historically, elevated loss ratios have coincided with both capitulation events and consolidation before recoveries; however, the immediate effect tends to be negative for price action as weaker hands exit and volatility rises. Contributing factors — broader crypto correction, reduced institutional buying, and uncertain macro conditions — reinforce downside risk. For traders this suggests a bearish short-term bias: expect increased volatility, potential tests of lower support levels, and higher liquidation risk. If selling stabilizes and on-chain metrics (active addresses, transaction volume, inflows to exchanges) improve or institutional flows return, the metric can flip to a neutral/bullish signal indicating accumulation. Therefore, the likely near-term outcome is bearish, while medium-to-long-term direction depends on whether network fundamentals and demand recover.