Ethereum's recent price surge has propelled a vast majority of its holders into significant profit. While such widespread gains often signal market overheating, on-chain data suggests a different narrative, indicating potential for continued upside rather than an imminent correction.
Market Outlook: Room to Run
Despite an impressive 97% of Ethereum addresses currently holding profitable positions, the market may not be on the brink of exhaustion. Key on-chain indicators, such as Glassnode’s MVRV Extreme Values, remain well below historical 'red zone' levels that typically mark cycle tops. The MVRV, hovering near 2.0, still has considerable room to grow before reaching past peaks of 3.0-3.2, last seen during euphoric phases in 2017, 2021, and late 2023. This suggests the market is likely in an early to mid-stage profit realization cycle, rather than nearing a final blow-off top, leaving ample space for further price appreciation.
Short-Term Holders Fueling the Rally
The current profit wave in Ethereum has been disproportionately driven by short-term investors, those holding ETH for less than six months. Glassnode data reveals that ETH’s 7-day Simple Moving Average (SMA) Realized Profits soared to $771 million per day in July, surpassing previous highs from December 2024, before easing slightly. This aggressive profit-taking by fast-moving traders, surprisingly, has not led to the profit saturation typically preceding major market tops. Instead, this ongoing rotation from long-term stability to short-term cash-outs signifies a rally fueled by active turnover and sustained demand, rather than market exhaustion, paving the way for potential further price expansion.
