Ethereum Dips To $2,250 As Trader Profit-Taking Hits 3-Week High

On-chain data shows investor realized profits on the Ethereum network have hit their highest level in three weeks alongside the dip in the ETH price.

The metric works by going through the transfer history of each token being sold on the blockchain to determine the price at which it was moved prior to this. If the previous transaction value was less than the latest selling price for any coin, then the token’s sale is considered to be leading to the realization of some net profit. Similarly, the opposite arrangement points to loss-taking.

The exact degree of profit or loss involved in each case is equal to the difference between the two prices. The Network Realized Profit/Loss sums up this profit and loss for all transactions occurring on the network and determines their net value.

Now, here is the chart shared by Santiment that shows the trend in the indicator for Ethereum over the past month:

Interestingly, the distribution didn’t align with the local high from earlier in the week. Instead, it came after the cryptocurrency had already dipped. This means that some investors who were sitting on profits panicked by the price drawdown and just decided to exit with some gains.

These holders could be the buyers from the February-March depressed market phase, when Ethereum was trading below $2,000. As the analytics firm explained:

Wallets that accumulated during those months are still in profit even with this mid-May decline, and many have decided to sell while they feel they still have the opportunity to enjoy a profit.

Since the profit realization has occurred, Ethereum has witnessed a further dip, a potential sign that this distribution may have been a contributor. It now remains to be seen whether the Network Realized Profit/Loss will stay positive in the coming days or if loss-taking will follow next.

At the time of writing, Ethereum is floating around $2,250, down 2.6% in the last seven days.