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Following an impressive 5% rise within the last 24 hours, Ethereum (ETH) still grapples with a downtrend, as evidenced by an 11.17% loss within the past week. However, recent analysis by the renowned analytics platform, Glassnode, has identified an important price level that could provide short-term support for the currency.
In a post on March 14, Glassnode scrutinized the ETH market and highlighted a potential support level at $1,886. The analysis was based on the Cost Basis Distribution (CBD) metric, a significant on-chain metric in the crypto market that tracks the price levels at which tokens were last bought or sold. This metric is particularly useful in identifying support or resistance levels, as these often align with price ranges where a large number of coins have been acquired.
Glassnode’s analysis of Ethereum’s CBD data reveals that the supply of ETH at $1,886 has increased from 1.6 million to 1.9 million, indicating the acquisition of an additional 300,000 ETH when the price last hit this level. This suggests that a substantial number of investors consider $1,886 to be a key price point, and are likely to bolster their holdings at this level, creating a strong support zone to ward off further price decline.
This conclusion dovetails with insights gleaned from Glassnode’s custom capitulation metric, which is designed to capture price capitulation events by utilizing weighted sell volumes and non-linear economic pain experienced by investors. However, it’s crucial to note that the support offered by the $1,886 price level is likely to be short-term and could capitulate if selling pressure becomes overwhelming.
At the time of writing, Ethereum is trading at $1,924 following the recent 5% gain. However, the market’s daily trading volume has decreased by 29.29% to $12.91 billion. The Relative Strength Index metric suggests that Ethereum could soon enter the oversold region, which may precipitate a price reversal.
Despite these positive signs, ETH bulls face significant resistance at $2,249, $2,539, and $2,829. To effect a substantial rebound and halt the current downtrend, these levels must be overcome. Conversely, if the price falls decisively below $1,886, it could lead to further declines to levels such as $1,650 and $1,132.
This analysis provides an insightful snapshot of the current ETH market, emphasizing the importance of key price points and investor behavior in shaping market dynamics. As Ethereum navigates the volatility of the crypto market, these indicators offer a useful guide to potential future trends and shifts.
Featured image from iStock, chart from Tradingview.
