Both Bitcoin and Ethereum Have Reached the Highest Supply in Profit This Year
Both Bitcoin and Ethereum demonstrate a sustainable growth, reaching the local peaks and generating high profits for their holders.
Bitcoin’s Price Dynamics
According to the blockchain analytics company Santiment, the BTC price has approached the critical level of $46,800 for the first time since January 4th. The highest level in 11 weeks can be largely attributed to the declining concerns regarding inflation, the War in Ukraine, and COVID-19 concerns. The investors’ growing optimism largely contributes to the increasing demand for risky assets such as cryptocurrency. The average returns per trader have exceeded 10% for the first time since February. At the moment, Bitcoin successfully confirms its status as one of the most profitable and reliable assets for long-term investments. On the downside, Santiment’s data indicates that the BTC price has reached the higher risk area. If the major fundamental factors remain stable, there is a high likelihood of it entering the historical sell zone, increasing the risks of significant correction in the following weeks. Therefore, investors and BTC holders should consider all such risks in order to determine better-supported strategies to maximize long-term returns. In any case, considerable price volatility may continue to exist in the future as the degree of international and macroeconomic instability remains high. However, the BTC price stabilization above $45,000 is still perceived as a positive indicator by most investors. The current phase of consolidation may precede a new wave of rapid bullish growth in the following months.
Ethereum’s Price Dynamics
Ethereum tends to demonstrate even more rapid price dynamics in the recent weeks. One of the reasons is the investors’ growing optimism regarding the transition to Ethereum 2.0 and the proof-of-stake mechanism. In this manner, Ethereum’s network can successfully address the major scalability and cost concerns that negatively affect its competitive positions as compared with Solana, Avalanche, and other alternatives. Another positive aspect is the growing adoption of smart contracts by members of the broader community with the more intense utilization of Ethereum’s platform. The development of the NFT segment may also become more reliable after the adoption of new layer-2 solutions for Ethereum-based NFTs.
Ethereum’s rapid price growth has allowed it to exceed the important level of $3,300, confirming the highest level of optimism within the past few months. At the same time, the RSI indicator indicates that Ethereum has entered the overbought area with a high likelihood of further price correction in the near future. The RSI Indicator has reached the value of 79 that is generally interpreted as being a sign of unjustified optimism. Therefore, Ethereum may be unable to maintain such high rates of appreciation in the following weeks.  The risks of price correction (and even more serious as compared with BTC) remain significant.
Profitability of Investments in BTC and ETH
While the actual profitability rates achieved by each individual investor vary according to their points of entry, the average rates exceed 10% for both Bitcoin’s and Ethereum’s holders. The growing proportion of the overall supply of the main cryptocurrencies also indicates positive returns. Thus, the percentage of the BTC supply in profit has reached 81.8%, and the percentage of ETH supply in profit has reached 86.4%. Both of these levels are the highest since the beginning of this year.
The major short-term effects of the record profitability reached by BTC and ETH refer to the increased interest in crypto assets among members of the general population with the high likelihood of growing investments in BTC and ETH in the following days. However, the long-term trends remain more uncertain. If the percentage of the total supply in profits reaches 90% and more, a new wave of price decline may occur as indicated by historical figures. Thus, the overall implication of the current market trends is such that the crypto market and the major cryptocurrencies indicate the early signs of recovery. At the same time, the overall level of market uncertainty remains critically high, making the risks of price correction and market volatility significant in April.
