The latest analysis from the market intelligence platform IntoTheBlock has shed light on the strong on-chain demand zones that Ethereum has established, indicating solid support levels that could help the cryptocurrency stay above $4,000.
Ethereum currently has two major support centers just below its current price, as highlighted by IntoTheBlock’s recent post on X. The chart shared by the analytics firm illustrates the amount of supply that investors have purchased at price ranges near the current value of ETH. The data reveals that there are two significant demand zones below the current price, specifically in the $3,772 to $3,892 and $3,892 to $4,011 ranges. These levels represent the cost basis for a substantial number of addresses, with investors having acquired a total of 7.2 million ETH at these levels, equivalent to nearly $28.4 billion at current exchange rates.
Demand zones play a crucial role in on-chain analysis, as they reflect investor psychology and behavior. Investors are more likely to act when the price approaches their cost basis, either by buying more if they were previously in profit or selling to break even if they were at a loss. When a large number of holders are involved, these reactions can lead to visible price fluctuations.
Given the significant buying interest at the aforementioned price ranges, Ethereum could find strong support if it retests these levels. The recent dip in Ethereum’s price has brought it closer to these demand zones, and the market’s response to this critical juncture will determine whether Ethereum can reclaim the $4,000 mark.
In addition to the on-chain demand analysis, IntoTheBlock has also highlighted the negative trend in Ethereum’s Exchange Netflow since the beginning of the month. The Exchange Netflow tracks the net amount of Ethereum flowing into or out of centralized exchange wallets, with over 400k ETH flowing out since December 1st, indicating a trend of accumulation.
As of the latest update, Ethereum is trading around $3,950, showing a 10% increase over the past week. The price chart suggests a pullback in the coin’s value in the past day, but the overall sentiment remains positive for Ethereum’s price trajectory.
In conclusion, Ethereum’s robust on-chain demand zones and positive Exchange Netflow trends indicate a favorable outlook for the cryptocurrency’s price stability above $4,000. Investors will closely monitor the market’s response to the critical support levels to gauge Ethereum’s potential for a bullish rally in the near future.
Source: IntoTheBlock