Ethereum has cleared the $2,100 level during the past day, and if on-chain data is anything to go by, a rally to new yearly highs should be “easy.”
Ethereum Has No Major On-Chain Resistance At Higher Levels
An analyst in a on X explained that Ethereum has overcome a major on-chain resistance zone with its recent price rally. The on-chain resistance and support levels are defined based on the density of investors who bought at them.
The reason behind this lies in how investor psychology tends to work. For any investor, their cost basis is an important level, so whenever the price retests, they pay special attention and might be tempted to make some kind of move.
A holder who had been at a loss before the retest might lean towards selling, as they may fear the cryptocurrency would dip below it again, so exiting at the break-even would at least mean they would avoid losses.
Similarly, an investor might decide to accumulate more if they had been in profits earlier, as they would see this same level as a profitable point of entry into the asset.
Now, here is a chart that shows how the Ethereum price ranges around the current price are looking in terms of the density of investors who share their cost basis there:
Looks like the levels above don't host the cost basis of that many investors | Source:
As displayed in the above graph, the Ethereum price range between $1,982 and $2,044 hosts the cost basis of about 1.67 million addresses, which acquired 38.73 million ETH at these levels.
Naturally, the more investors that share their cost basis inside a specific range, the stronger the reaction that the price would feel when it retests due to the aforementioned buying/selling effects.
Thus, this range that’s thick with investors would be a significant zone for the cryptocurrency. Since Ethereum has already surged past this area and has gained some distance over it with its latest break, the range is likely to play the role of support now.
Ethereum has this strong support area under its belt, while at the same time, there are no major resistance zones immediately above, as is apparent from the chart. This ideal setup means that, in theory, ETH shouldn’t have much trouble rallying towards the $2,426 level.
Another has also pointed out how Ethereum has observed negative exchange netflows since the start of the month. The exchange netflow here is an indicator that keeps track of the net amount of ETH exiting or entering the wallets of all centralized exchanges.
The indicator's value has been negative recently | Source:
The net outflows have amounted to over $1 billion during this period, a potential sign that significant buying has been occurring in the space. This certainly fuels the idea that ETH could explore new yearly highs shortly.
ETH Price
At the time of writing, Ethereum is trading at around $2,100, up 9% in the past week.
ETH has been climbing in the last few days | Source:
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, IntoTheBlock.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Read more
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
Close
Disclaimer: The information found on NewsBTC is for educational purposes
only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any
investments and naturally investing carries risks. You are advised to conduct your own
research before making any investment decisions. Use information provided on this website
entirely at your own risk.
