Ethereum Support Levels Below $1,530 Are Critically Low
Analyst Ali has shared insights on the current support and resistance levels of Ethereum based on on-chain analysis. These levels are determined by the density of investors’ cost bases, which refer to the average price at which coins were acquired on the blockchain.
When the spot price intersects with a holder’s cost basis, it may influence their decision-making. If the price was previously below the cost basis, investors might be tempted to sell, fearing potential losses. Conversely, if the price retests the cost basis from above, investors may choose to accumulate more.
However, not all investors think alike. Nevertheless, if significant amounts of coins were purchased within certain price ranges, these behaviors may become noticeable.
The Density of Cost Bases
A chart depicting Ethereum’s current price ranges based on the density of cost bases reveals that the current range has modest on-chain support while higher levels face significant resistance due to dense cost bases.
Worse still, levels below the current range lack substantial support, indicating vulnerability. The analyst warns that a daily close below $1,530 could signal a steep correction for ETH.
ETH Price and Conclusion
Ethereum is currently trading around $1,575, meaning that it is nearing the critical support level of $1,530. Monitoring this level closely is essential as breaching it could result in a significant downward movement for ETH.
Hot Take: Ethereum’s Support Levels Raise Concerns for Potential Drawdown
Based on on-chain analysis, the support levels for Ethereum below $1,530 are currently thin. The density of cost bases reveals modest on-chain support within the current price range, while higher levels face significant resistance. However, levels below the current range lack substantial support, indicating vulnerability.
With Ethereum trading around $1,575, breaching the $1,530 support level could lead to a steep correction. It is crucial to closely monitor ETH’s performance as it approaches this critical level to assess the potential drawdown and its implications for investors.
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