- Ethereum’s second quarter results were unprofitable, signaling a difficult quarter.
- The price surge led to whales and retail investors locking in profits.
Ethereum [ETH] Following the announcement of the Ethereum ETF, it has seen a surge in price and popularity in the past few days.
Disappointing Quarter
Despite this, the ecosystem hasn’t been doing too well: Ethereum was unprofitable in the second quarter, according to data from Token Terminal.
If Ethereum continues to have trouble generating revenue, it will become even more difficult for the network to sell its holdings.
Source: X
However, interest in ETH remained relatively high.
Following the approval of a spot Ethereum exchange-traded fund (ETF) in the United States on May 23, over $3 billion in Ethereum was withdrawn from centralized cryptocurrency exchanges, suggesting a possible supply shortage.
According to the data, the volume of Ethereum on exchanges fell by about 797,000, or $3.02 billion, between May 23 and June 2.
Source: CryptoQuant
This reduction in exchange reserves means that less ETH will be available for sale as investors move assets into self-custody for purposes other than immediate sale.
The supply of Ethereum on exchanges currently sits at 10.6%, the lowest it has been in years, and this drop in supply, combined with a surge in demand from investors following the approval of a number of ETFs, could drive the price of ETH even higher, possibly approaching its all-time high (ATH).
Still, concerns remain that Grayscale Ethereum Trust (ETHE), which manages $11 billion in funds, could affect Ethereum price volatility, based on the example of Grayscale Bitcoin Trust (GBTC), which saw $6.5 billion in outflows within a month of its approval.
What is the situation with ETH?
At the time of writing, ETH was trading at $3,833.59, with the price increasing by 1.19% in the past 24 hours. Surprisingly, interest from both large and retail investors has slightly decreased in the past few days.
AMBCrypto’s investigation of Santiment data revealed that groups holding between 0.01 ETH and 10 ETH have seen a decline in the total amount of ETH they hold.
Additionally, addresses that held even more ETH have also sold off some of their ETH.
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This behavior, exhibited by both whales and retail investors, indicates that many holders were indulging in some degree of profit-taking as prices soared.
However, the selling pressure was not significant enough to have a negative impact on prices.
Source: Santiment
