The recent surge in bullish momentum within the cryptocurrency market towards the end of April saw Ethereum’s price closing the month above $1,800. Despite this, Ethereum failed to end the month in profit, marking its fourth consecutive month with a negative performance. However, on-chain data indicates that the Ethereum price is currently hovering above a crucial support level that could determine its trajectory in the coming weeks.
ETH Price Potentially Dropping to $1,772
According to a post by prominent crypto analyst Ali Martinez on the X platform on May 3, Ethereum’s price is at a critical juncture that may dictate its short-term future. Based on recent on-chain data, there is a risk of Ethereum falling to around $1,500 if it fails to hold this support level in the near future.
The evaluation of Ethereum’s price is based on the average cost bases of various Ethereum investors. In the realm of crypto trading, cost-basis analysis assesses a price level’s ability to act as support or resistance based on the volume of coins acquired by investors in that range.
The chart above illustrates the average cost bases of Ethereum investors, with the size of the dots representing the number of Ether tokens purchased within a specific price region. A larger circle indicates a higher volume of tokens bought in that price zone, resulting in a stronger support or resistance level.
Support Level Analysis and Potential Price Movements
Data from IntoTheBlock reveals that over 6.36 million ETH tokens were acquired by 4.5 million addresses within the price range of $1,772 to $1,824, with an average price of $1,799. This high buying activity has established a significant support level just below the current price.
If the Ethereum price drops to around $1,772, investors with cost bases in that range are likely to defend their positions by purchasing more tokens, potentially keeping the price above the support region. However, if $1,772 is breached, the lack of significant investor activity below this level suggests that Ethereum could decline to around $1,500 without much resistance.
On the flip side, if the $1,772 support level remains intact, Ethereum’s price could soar to $2,100, as there are no major obstacles ahead.
Current Ethereum Price and Outlook
At the time of writing, Ethereum is trading at approximately $1,830, reflecting a nearly 1% increase in the past 24 hours.
In conclusion, while Ethereum faces potential downward pressure towards the $1,772 support level, a breach of this level could lead to a further drop to $1,500. On the other hand, maintaining the support level could pave the way for a price surge to $2,100. Traders and investors are advised to monitor these key levels closely for potential trading opportunities.
(Image sources: iStock, TradingView)