Ethereum Holders at 97% Profitability: Will 2025 Repeat 2021 ETH Price Crash?

Ethereum’s native token, Ether (ETH), has reached its highest profitability levels since late 2021, raising questions about whether the cryptocurrency is at risk of repeating its last major cycle peak.

97% of Ethereum addresses are now in profit, onchain data from Glassnode shows. The last time ETH saw a similar reading was November 2021, when prices topped around $4,868 before a prolonged bear market dragged them down to $880.

High profitability often signals overheated conditions as investors sitting on gains face growing incentives to take profits, historically coinciding with market tops or sharp corrections.

Ethereum Fundamental Analysis Then vs. Now

In 2021, ETH’s profitability spike occurred amid excess liquidity and retail-driven speculation, but with limited institutional backing.

When macro conditions shifted, led by the Federal Reserve tightening and slowing liquidity, Ethereum and the broader crypto market were left vulnerable, triggering a brutal 80% decline.

Today’s setup is more complex. While the profitability reading looks eerily similar, the macro and structural backdrop differ. For instance, Spot Ethereum ETFs have attracted institutional capital, creating a more durable demand base.

Staking growth continues to reduce liquid supply, with more than a third of ETH now locked in validator contracts.

Macro headwinds still exist. Sticky US inflation (PPI) and rate policy uncertainty could weigh on risk assets. ETH has shown relative resilience compared to previous tightening cycles, nonetheless.

Will Ethereum Price Crash Further in 2025?

Ethereum could be nearing a local top if history rhymes, with profit-taking creating short-term downside risks. At the same time, new structural demand drivers may soften the blow compared to 2021’s collapse.

Analyst Michaël van de Poppe anticipates Ether to decline toward $3,940 from its current price levels of around $4,210. Still, the chartist considers them areas where ETH can bounce back.

Holding above the psychological support near $4,000 increases ETH’s odds of rallying toward a new record high at or above $5,000 by September. A sustained rally, on the other hand, could push the price to over $7,300.

The upside target aligns with Ethereum’s 1.618 Fibonacci retracement line.