Understanding Cryptocurrency Profitability: Dogecoin and More
Explore the latest insights from on-chain data, revealing how Dogecoin and other major cryptocurrencies are faring in terms of profitability. This analysis is backed by expert reviews and thorough editorial scrutiny.
Profitability Trends in Leading Cryptocurrencies: Dogecoin, Bitcoin, and XRP
Recent insights from Glassnode, a renowned on-chain analytics firm, shed light on the profitability shifts among top cryptocurrencies. The focus is on the “Supply in Profit,” a critical metric indicating the percentage of an asset’s circulating supply that currently holds unrealized profit.
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Decoding Supply in Profit
The “Supply in Profit” metric evaluates each coin’s transaction history to determine its last transfer price. If the previous sale price of a coin is below the current market rate, the coin is deemed to be in profit. This metric aggregates such coins to ascertain their percentage of the total supply.
Conversely, the “Supply in Loss” highlights the coins operating at a loss. As the total supply must equal 100%, the “Supply in Loss” can be easily calculated by deducting the “Supply in Profit” from 100%.
Recent Market Movements
A recent chart from Glassnode depicted the 7-day simple moving average (SMA) for the “Supply in Profit” across eight cryptocurrencies over recent months. The data reveals a downward trend in profitability for these assets, largely due to a market-wide slump.
However, the extent of this decline varies. While Dogecoin (DOGE) has seen a 32.3% increase in its supply moving into loss, placing its “Supply in Profit” at 50.8%, other cryptocurrencies like Ethereum (ETH) and Solana (SOL) have experienced even steeper declines. Ethereum’s “Supply in Profit” fell to 44.9%, and Solana’s plummeted to 31.6%.
Contrasting Cases: XRP and Tron
In stark contrast, XRP and Tron (TRX) maintain over 80% of their circulating supply in profit. Bitcoin (BTC) and Toncoin (TON) also have a significant majority of their supply in profit, at 76.8% and 76.7%, respectively.
Implications for Future Price Movements
Historically, a higher “Supply in Profit” can signal potential bearish trends, as holders in profit might sell off, hindering price rallies. Conversely, a lower “Supply in Profit” might indicate a cryptocurrency’s price bottoming out, potentially paving the way for future gains. From this angle, Dogecoin, Ethereum, and Solana could be better positioned for future price action compared to XRP and Tron.
Dogecoin’s Market Status
As of the latest data, Dogecoin is trading at approximately $0.154, marking an impressive 11% increase over the past 24 hours. This rebound highlights the dynamic nature of the cryptocurrency market.
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