“Is now a good time to buy Ethereum?” — Recently, such questions have repeatedly appeared in the market, reflecting a certain degree of investor confusion. In fact, instead of getting entangled in the absolute highs and lows of prices, it is better to focus on one key indicator: the profit supply ratio, which can more objectively reveal the current risks and opportunities in the market.
1. Current market risk signal: 95% profit supply ratio
As of July 18, 2025, the profit supply ratio of Ethereum is 95%. This means that 95% of the circulating Ethereum in the current market is in profit, which has entered a short-term risk zone. The significance of this data is:
1. Profit-taking pressure risk: When the vast majority of holders are in profit, the market is prone to concentrated selling behavior. For example, in March, May, and December 2024, after this indicator entered a similar range, Ethereum experienced a phase pullback.
2. Divergence between price and risk: Although the current price is at a phase high (3693 USD), the high profit supply ratio more directly reflects the overzealous market sentiment. Historical data shows that when the profit supply ratio exceeds 90%, the probability of a short-term pullback significantly increases.
Two, historical comparison: The risk difference between 53% and 95%
On June 22, 2025, when Ethereum pulled back to 2230 USD, the profit supply ratio was 53%. The risk characteristics of this point sharply contrast with the current situation:
- The buffering effect of loss-making chips: At that time, nearly half of the chips were in a loss state, and the market's selling pressure was relatively dispersed, making the risk clearly lower than it is now.
- The logical difference in entry timing: If the future price is higher than the current level but the profit supply ratio is lower (for example, adjusted to below 50%), the risk will be significantly reduced. For instance, if Ethereum rises to 10,000 USD and then adjusts to 7,000 USD after high-level turnover, the profit supply ratio may drop below 50%, making the entry risk lower than the current ‘3693 USD + 95% profit supply ratio’ combination.
Three, core logic: Data is more important than price
1. The misleading nature of price fluctuations: Simply looking at the highs and lows of prices cannot accurately reflect market risk. For example, in February 2025, the price of Ethereum once broke through 3600 USD, but then pulled back to 2230 USD, while changes in the profit supply ratio more clearly revealed the turning point of market sentiment.
2. The essence of the profit supply ratio: This indicator reflects the cost distribution of market holders. When the profit supply ratio is excessively high, it means that most investors have made a profit, and the market lacks the sustained momentum to push prices higher, making it easy to experience a reversal of sentiment from bullish to bearish.
Four, the dialectical relationship between short-term risk and long-term trend
1. The inevitability of short-term adjustment: The current 95% profit supply ratio indicates that the profit effect in the short-term market has peaked, and it is highly likely that time is needed for adjustment. This may manifest as price fluctuations, shrinking trading volume, or slight pullbacks.
2. The independence of long-term trends: Short-term risk points do not mean the end of the trend. The fundamentals of Ethereum (such as the staking ratio of 29.3%, ETF fund inflows reaching historical highs) still support its long-term value. For example, after Meituan sold all its cryptocurrencies in December 2024, Ethereum still achieved significant gains in the first half of 2025.
Five, investor decision-making suggestions
1. Matching risk tolerance: For investors with a higher risk tolerance, attention can be paid to opportunities when the profit supply ratio falls below 70%; for conservative investors, it is recommended to wait for the indicator to drop below 50% before considering entering the market.
2. Position management strategy: Regardless of when to enter the market, a staggered position-building strategy should be adopted to avoid overly concentrated investment at a single price point. For example, funds can be divided into 3-5 parts, gradually increasing positions as the profit supply ratio decreases by 10%.
3. Dynamic tracking of key indicators: In addition to the profit supply ratio, attention should also be paid to Ethereum’s on-chain activity (such as daily trading volume, number of active addresses), changes in staking volume, and macro policy trends (such as the impact of U.S. stablecoin regulatory legislation).
Conclusion
The current profit supply ratio of the Ethereum market has entered a short-term risk zone, and investors need to be wary of the pullback risk from profit-taking pressure. However, this does not mean the end of the long-term trend. For investors with a higher risk tolerance, it is advisable to wait until the profit supply ratio drops below 70% before gradually building positions; for conservative investors, it is recommended to wait for the indicator to fall below 50% before entering the market. Regardless of the strategy adopted, dynamically tracking data and formulating a trading plan based on individual circumstances is key to steady profits in the cryptocurrency market.$BTC $ETH 
