One analyst has explained that ethereum could be primed to see a new rally based on on-chain data. This is the level that eth may end up surpassing.
ethereum has no significant on-chain resistance ahead
in a new mail In X, analyst Ali analyzed what ethereum support and resistance levels look like based on on-chain data. In on-chain analysis, the potential of any level to provide a notable amount of price support/resistance depends on the number of investors who purchased its coins.
Here is a chart showing the amount of eth that was purchased in some of the price ranges the asset has visited before:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/Ethereum-39poised-for-further-gains39-analyst-raises-this-goal.jpeg" alt="ethereum On-Chain Support and Resistance” width=”2352″ height=”860″ loading=”lazy”/>
The density of cost basis at each of the different eth price ranges | Source: @ali_charts on X
The chart shows that the range from $2235 to $2302 carries the cost basis of a significant number of coins. More specifically, 1.84 million addresses acquired more than 6 million eth within this range.
Currently, ethereum price is trading just above this range, implying that all of these investors are in the green. If the ethereum spot price returns to this range, these holders could show some reaction as their profit and loss limit would be tested again.
Since these holders would have made profits just before the retest, they may want to buy more as they may believe that this same previously profitable price range could once again be a worthy buy.
Since the range is wide among investors, this buying effect that may emerge on a retest could end up providing support to the price. If the support fails, the price could be between $1,958 and $2,029.
This range is much stronger and has a base cost of over 37 million eth. Ali notes that this support could help cushion any correction that may take place.
Now, ethereum has strong support underneath and as seen on the chart, there is no major demand wall above it simultaneously. Loss-making investors (those with a cost base higher than the current spot price) may be desperate to escape the market, so rising the price to its breakeven point may be a tempting exit opportunity.
If many holders have losses, their demand zone could provide significant price resistance due to such selling. eth has no such obstacles in the nearby price ranges, so the coin could rise further. “The path ahead for eth is clear, with no significant supply barriers in sight, suggesting a potential rise to $2,700 or higher,” explains the analyst.
The market intelligence platform In the block He has also shared a chart that could provide further evidence of an ethereum bull case.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/1704147380_302_Ethereum-39poised-for-further-gains39-analyst-raises-this-goal.jpeg" alt="Long-Term ethereum Holders” width=”680″ height=”370″/>
The trend in the HODLer ratio for bitcoin and ethereum | Source: IntoTheBlock
As can be seen in the chart above, the percentage of ethereum investors who can be classified as “HODLers” (over 1 year holding time) has skyrocketed recently. “This year, the percentage of long-term eth holders surpassed that of bitcoin for the second time!” IntoTheBlock notes.
eth price
ethereum is currently at the $2,316 mark, not far above the support zone mentioned above.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/Ethereum-39poised-for-further-gains39-analyst-raises-this-goal" alt="ethereum price chart” width=”1534″ height=”868″/>
Looks like the price of the coin hasn't been moving much recently | Source: ETHUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, IntoTheBlock.com
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