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Ethereum’s Profitability Plummets: A Cause for Concern?
According to recent data, only 66% of Ethereum addresses are profitable at the moment, a level not seen since October 2023 when the cryptocurrency was worth $1,800. At present, Ethereum’s price is around $2,673.85, with 78.8 billion in trading volume during the last 24 hours, and its current 24-hour trading activity amounts to $17.2 billion.
However, the market remains cautious as despite a 1.38% rise in price over the past 24 hour period. The market value of the cryptocurrency is roughly $321.6 billion, and it has a circulation of 120,270,278 ETH coins. The technical indicators’ readings are mixed, with the RSI being 41.04, suggesting suppleness. However, the Moving Average Convergence (MACD) line remains below the signal line, indicating dovish trends.
This implies that the cryptocurrency may face a correction, which could potentially harm the profitability of Ethereum addresses. The decline in profitability is largely due to the market instability that has been prevalent in the crypto space. The cryptocurrency’s value has been trading within a narrow range, with little activity outside of the $2,700-$2,800 resistance zone.
A recent report by IntoTheBlock found that 66% of Ethereum addresses are currently profitable, compared to the last peak in October 2023. A large number of Ethereum owners are now holding onto losses, which could result in heightened selling pressure over the next few weeks.
The decline in profitability of Bitcoin is not only related to its own cryptocurrency but also has impacted other non-profitable entities such as the DeFi industry that relies on Ethereum. Recent data indicates that overall losses from these exploits have been decreasing every quarter, while the proportion of economic losses is increasing.
The evidence indicates that attacks are decreasing in frequency, but they are becoming more severe each time, posing a significant threat to the DeFi ecosystem. To address these risks, technological advancements necessitate the development of economic risk mitigation strategies.
The effort entails the creation of advanced risk management techniques and regulations to safeguard investors from fraudulent activities. One area with significant potential is the integration of artificial intelligence (AI) into the DeFi ecosystem. AI can play a crucial role in reducing risks and expediting approval of loans in the deFi domain.
For more insights on how AI can revolutionize the DeFi industry, read our article: “Artificial Intelligence in DeFi: The Future of Lending”.
In summary, the decrease in profitability of Ethereum is worrisome for investors, and the market’s uncertain sentiment is expected to persist in the short term. Despite the challenges posed by advanced risk management tools and AI-driven advancements, the DeFi industry is expected to benefit greatly. As the cryptocurrency market continues to evolve, investors must remain vigilant and adapt to changes in market conditions.
