Ethereum price faces a major supply wall at $3,500

On-chain data suggests that ethereum is facing substantial resistance at the $3,500 price level as the price retreats from the threshold.

IntoTheBlock shared details on Monday showing that the aforementioned price remains elusive for ethereum (eth) bulls since July 16.

At the time of writing, eth is hovering around $3,448 and has dropped 1.8% over the past 24 hours, retreating from intraday highs above $3,560. But why is the $3,500 to $3,600 price level likely to be a major supply wall for ethereum?

According to IntoTheBlock, the main factor helping the bears in this zone is the 3.13 million ethereum addresses that purchased the coins. In total, these addresses acquired over 1.56 million eth at an average purchase price of $3,547.

Losing eth addresses could be sold

While the overall sentiment is bullish for cryptocurrencies, the potential points to coins acquired at the $3500 level or higher that can lead to profitable or breakeven trades.

“These addresses remain in the red, increasing selling pressure and making it difficult for eth to break through this key level,” analysts at the on-chain market intelligence and data platform said.

It is also noteworthy that 84% of eth holders are currently profitable, with roughly 5% in the money and only 11% out of the money. However, the positive sentiment is still colored by a bearish signal from the derivatives market, where the futures momentum indicator shows a bearish reading with a value of -0.5.

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ethereum spot ETFs could be a factor

Even though the ethereum price is struggling at the current level, the market is more optimistic as it awaits the debut of eth spot ETFs.

After issuers filed final S-1 registration statements last week, including details such as fees, the trading debut will be this week. Experts have pointed to a possible launch on July 23.

Recently, analyst Rekt Capital x.com/rektcapital/status/1814645694453719093″ target=”_blank” rel=””>noted A macro bullish flag for ethereum, highlighting that this pattern signals trend continuation. This means that the $4,000 threshold may not be out of reach for the bulls for much longer.

Cryptocurrency analyst Moon Carl noted a bullish inverted head and shoulders pattern on July 21. If this pattern plays out, the analyst believes eth could target $4,300 in the near term.

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On the downside, the immediate support level is around the $3,449 to $3,390 range.