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.
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.
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.
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.
Yashu Gola is a crypto journalist and analyst with expertise in digital assets, blockchain, and macroeconomics. He provides in-depth market analysis, technical chart patterns, and insights on global economic impacts. His work bridges traditional finance and crypto, offering actionable advice and educational content. Passionate about blockchain's role in finance, he studies behavioral finance to predict memecoin trends.