Ethereum Profit Metric Hits 2017 Low: Is Another Decline Ahead for ETH?

Ethereum has plunged to levels not seen in recent years as a key on-chain profitability metric hits its lowest level since 2017, sparking renewed discussions on whether the market has fully absorbed the ongoing bear cycle.

As reported by crypto.news, Ethereum’s (ETH) price hovered around $1,685 on June 8, rebounding from a recent low of about $1,505 during last week’s broader market sell-off. Despite this bounce back, ETH remains among the lowest-performing major cryptocurrencies this year as investors cut back on risk assets.

According to SoSoValue data, U.S. spot Ethereum ETFs have registered roughly $885 million in net outflows over the past month, continuing a trend of capital leaving Ethereum investment products.

This trend of outflows has coincided with a decrease in derivatives activity, as open interest and leveraged long positions have notably dropped during this correction phase.

Meanwhile, on-chain data shows that Ethereum holders have lost much of the profit buffer that once supported bull markets.

Data from Glassnode reveals that only 11% of Ethereum’s circulating supply currently retains unrealized gains over 300%, matching the figures from February 2017. Unlike prior cycles, Ethereum has not experienced the same level of profitability expansion seen during the bull markets of 2017-18 and 2020-21, where over half of the network’s supply showed gains exceeding 300%.

This indicates that a far smaller number of Ethereum holders achieved the substantial gains typical of earlier market cycles, leaving many investors closer to their entry prices during this current downturn.

Historical bottom indicators still absent

Many analysts suggest that the reduction in deeply profitable supply places Ethereum at a critical inflection point.

Crypto analyst Ardi notes that previous bear markets for Ethereum only reached their lowest points after the weekly RSI fell below 30 and remained there for multiple weeks.

“We haven’t entered that oversold territory yet, and we hover just beneath $1,700. This is not a favorable situation when considerable macro support lies only 15% lower,” he remarked.

This statement comes as Ethereum’s weekly RSI closely approaches 31, slightly above the oversold region linked to major cycle lows in 2018 and 2022.

Ardi also highlighted that this current cycle is distinct from prior ones, as Ethereum has not experienced the parabolic breakout that characterized earlier bull markets. ETH has remained unusually long in the lower half of its RSI range, raising concerns about whether the asset will need to undergo a similar capitulation seen in previous bear phases.

Macro conditions have added complexity to the situation. Stronger-than-expected labor market data from the U.S. last week has tempered expectations for Federal Reserve interest rate cuts, bolstering the dollar and exerting pressure on risk assets. Bitcoin’s drop below $60,000 triggered a wave of liquidations across the cryptocurrency markets, pushing Ethereum toward levels not seen since early 2023.

Key resistance lingers around $1,700

The current price dynamics place Ethereum at a significant technical juncture. The daily chart reveals that ETH is trading beneath a descending trendline that has constrained rallies since April.

After bouncing back from the 1.0 Fibonacci retracement level around $1,509, ETH is trying to break through resistance at approximately $1,714. A breakout above this level could lead to targets of $1,874 and $1,987.

Momentum indicators present mixed signals. The daily RSI has recovered from oversold levels but remains below the neutral 50 threshold, while the MACD continues to be below its signal line, despite early signs of stabilization.

Short-term charts show that Ethereum is forming a bearish flag after recovering from its June 6 low near $1,505. This recovery is taking place within an upward-trending channel, with the price testing both the upper boundary of the pattern and Supertrend resistance around $1,710.

A rejection at the current levels could reinforce the bearish flag structure, bringing the $1,505 support area back into focus. In contrast, a move above the Supertrend resistance around $1,710 and the channel would invalidate the bearish setup, suggesting buyers may be regaining control.

CoinGlass liquidation data reveals a significant concentration of short liquidations between $1,710 and $1,730, while notable long liquidations are clustered around $1,600, $1,580, and $1,540. These points could become essential liquidity targets as volatility increases.

At present, Ethereum finds itself at a pivotal moment, balancing a historically weak profitability profile with a technical structure that has yet to indicate a sustained recovery. Whether the latest figures from Glassnode suggest late-stage capitulation or merely a pause before further declines may depend on buyer actions around the $1,700 threshold.