Ethereum price hike increases profit supply to multi-year high

Ethereum is up almost 2% in the last 24 hours, even as major tokens, including Bitcoin, have seen sharp declines. However, on-chain analysis points to short-term price correction risks that could impact the second-largest digital asset by market capitalization.

Ethereum prices rose above $2,600 after the U.S. Securities and Exchange Commission (SEC) approved a number of spot Bitcoin ETFs on Wednesday. Ether was trading at $2,651 at 11:44 a.m. ET, according to The Block’s Price Page.

Ether Price Adjustment Risk

However, according to The Block’s data dashboard, Ethereum’s circulating supply is currently at 89.4%, the highest level since 2021. Increased yield supply may impact digital asset prices in the short term by encouraging traders to take profits. Terms.

One analyst pointed out factors supporting the bullish outlook for native tokens. Ethereum ETH

-2.40%
network. The SEC’s recent approval of a spot Bitcoin ETF has encouraged speculation that a spot Ether ETF could also arise in the near future, André Dragosch, head of research at ETC Group, told The Block. He said such an event would prove to be bullish for the second-largest digital asset by market capitalization.

Dragosch also said that the recent peak of profits in Ethereum’s circulating supply can also be seen as a stabilizing factor for the token.

“The reason is that there is less incentive to sell assets under these conditions, especially for long-term holders. However, weaker holders may still be inclined to take profits, but this is certainly beneficial to the ongoing bull market.” He added:

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