99% ETH hodlers has heavy losses compared to Bitcoin
The price volatility of Ethereum (ETH) is decreasing and will reach the lowest point in history if this momentum continues. For the past few months, ETH has stuck in a tight price bracket, with a relatively predictable price. And so, only 0.01% of ETH hodlers are profitable.
Ethereum is having the lowest price volatility in history
According to IntoTheBlock, 99.99% of Ethereum addresses are losing or breaking even after the weekly decline of ETH. The second-largest cryptocurrency in the market has dropped more than 23% since the beginning of November 2019.
According to Skew’s analysis, the ETH price has grown very little, with the index fluctuating at 1.73%.
Ether volatility – getting close to all time lows. Moved 1.73% on average the last 10 days. pic.twitter.com/uSdpwBAkRf
— skew (@skewdotcom) November 14, 2019
ETH has risen from $ 180 to $ 190 in recent weeks. However, the current market crash has wiped out the coin’s efforts. Ethereum is even showing signs of detachment from the influence of BTC, as the currency no longer faces selling or placing bets between BTC and ETH orders.
It can be said that November was especially tricky for Ethereum hodlers. However, the story is not always painful. By the end of October 2019, when ETH hovered at $ 187, more than 27% of hodlers were profitable. Meanwhile, 76.7% of traders and Bitcoin investors suffered heavy losses.
At press time, for $ 138, an estimate of only 0.01% of Ethereum addresses (4,120 to be exact) is profitable. It means the addresses containing a balance of tokens with an average purchase price lower than the current spot price.
Bitcoin hodlers still ‘in the money’
As of right now, Bitcoin hodlers are still more profitable than Ethereum hodlers, even after the Bitcoin price dropped to nearly $ 6,500. However, it is estimated that almost 55% of Bitcoin addresses are still profitable when BTC is at $ 6,731.
As AZCoin News reported, a majority of bitcoin hodlers are making money on their investments despite the cryptocurrency’s downtrend.
The depths of the 2011 bear market was 8 years ago this week. It was bitcoin’s worst: from $31.91 in June, to $1.91 in November. That’s -94%.
— Dan McArdle (@robustus) November 22, 2019
You can see the majority of Ethereum addresses buy ETH above $ 200. This means that ETH will need a protracted rally for most hodlers to regain profit. The periodic distribution of addresses ‘out of the money’ could pose a significant barrier to such a rally occurring, however. These indicate the location of potential sell walls—price bands that are likely to see notable selling pressure as ETH holders exit their positions to break-even, or take profit.
DeFi lockups could be driving prices down
We can hardly find the reason why the ETH price is falling. However, the reason that ETH reduces the chance of recovery is straightforward. It’s the usage of ETH as collateral in decentralized finance (DeFi) can make the ETH trading market less bright.
Source: DeFi Pulse
In fact, DeFi can significantly boost activity on the Ethereum chain, one of the keys to catalyzing a price recovery that is clearly awaited by more than 99% of ETH holders.
However, in the long term, DeFi may be exacerbating the currency’s current decline as different platforms liquidate ETH to meet debt obligations. The number of ETH locked in lending platforms like Compound has plummeted in recent weeks, confirming this trend.
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