Ethereum Faces Profit-Taking Risks After 88.57% Supply In Profit

Ethereum's recent surge above $3,000 is encountering resistance due to emerging profit-taking risks. On-chain indicators and volume patterns suggest potential short-term weakness in Ethereum's price unless key levels are breached.

According to Glassnode, as of July 14, 88.57% of the ETH supply was in profit, with the price hovering near $3,013. Historical data from the one-month chart indicates that whenever the percentage of ETH holders in profit surges, short-term corrections tend to follow. The Percent Supply in Profit metric tracks the proportion of circulating ETH whose acquisition cost is below the current market price. Spikes in this indicator often correspond to overheated rallies or post-rally exhaustion zones, a situation Ethereum is currently facing.

While Ethereum's price continued to climb from June 11 to July 14, the On-Balance Volume (OBV) formed a lower high, confirming a bearish divergence. This means fewer traders are participating in the current leg up, raising concerns about sustainability. The OBV risk was flagged, hinting at a potential price correction. Despite the correction, OBV hasn’t risen back and still poses another correction threat in the short term. OBV measures volume flow by adding volume on up days and subtracting it on down days. When OBV fails to keep up with price, it suggests weakening accumulation or growing seller strength behind the scenes.

ETH price hit resistance at $3,079. After being rejected at this zone, the price is now consolidating around $2,981. Immediate retracement support for ETH lies at the 0.236 Fibonacci level at $2,853 and the 0.382 level at $2,713. However, the ETH price chart suggests that $2,600 (0.5 Fib level) and $2,487 (0.618 Fib level) are the most critical support zones. These need to be breached for the overall structure to turn bearish. The broader bullish structure still holds as long as Ethereum stays above $2,713, as it coincides with a key breakout candle. If Ethereum breaks and closes above $3,079 (its recent swing high), and OBV begins trending upward, the short-term bearish hypothesis will be invalidated. This would signal renewed buying conviction and potentially open the path to higher levels. Until then, profit-taking and volume divergence suggest caution, especially as ETH hovers at a historically saturated profit level.