Ethereum's $3,000 Breakdown: Investors Face Mounting Losses Amid Declining Demand Ethereum has spent much of December under intense pressure, with its recent fall below the critical $3,000 mark leaving a significant imprint on investor sentiment. On-chain data reveals a stark deterioration in profitability across the network, signaling a challenging period for the second-largest cryptocurrency.
ETH Profitability Dips Below 60%
The most telling sign of Ethereum's current stress is the sharp decline in its supply currently held at a profit. On-chain metrics indicate that less than 60% of the total ETH supply is now profitable, a notable drop from earlier in December when this figure hovered above 70%. While Ethereum briefly reclaimed the $3,000 level on December 22nd, pushing profitability back up to 63%, this recovery was short-lived, with the price quickly retracting below the threshold within hours. This persistent struggle to maintain positions above $3,000 highlights a broader weakening of buying pressure and an inability to absorb sell-side activity.
Institutional Outflows and Whale Activity
Adding to Ethereum's woes, data from Glassnode shows a sustained trend of negative net flows into US Spot Ethereum ETFs since early November. This consistent outflow indicates a lack of institutional interest and demand, a crucial factor that previously fueled ETH's rallies to new all-time highs. As institutional buying has waned, Ethereum has struggled to counteract selling pressure, contributing to its recent price depreciation. Furthermore, notable whale movements have amplified concerns, with a wallet linked to Erik Voorhees recently swapping over 4,600 ETH (valued at $13.42 million) for Bitcoin Cash, following nearly nine years of inactivity. Simultaneously, BitMEX co-founder Arthur Hayes has also reportedly offloaded 1,871 ETH, totaling approximately $5.53 million, further exemplifying a cautious or disengaging trend among large holders.
