On-chain data shows Ethereum has successfully found a rebound at a major support zone, a positive sign for the asset’s exploration at higher levels.
Ethereum Recently Made A Retest Of A Strong On-Chain Support Zone
In terms of on-chain analysis, the potential of any particular price range to act as support or resistance lies in the total number of investors who bought their coins inside said price range.
The reason behind that is the holders are more likely to react whenever the price retests their cost basis or acquisition price, which is obviously an important level to them since it can flip their profit-loss situation.
A single holder showing such a reaction won’t cause any effects on the market, naturally, but if a large number of investors share their cost basis inside a tight range, the asset’s retest of the range could perhaps produce a sizeable reaction.
Hence, the larger the concentration of investors inside a particular range, the higher the ability of said range to act as resistance/support. Analyst Ali shared this chart recently in an X that showed how the various Ethereum price ranges looked like in terms of the amount of addresses who acquired their coins at them at the time of the post:
The various on-chain support and resistance levels | Source:
From the graph, it’s apparent that the $1,934 to $2,160 range is the Ethereum range that hosts the cost basis of the most amount of addresses. At the time Ali had made the post, Ethereum was retesting this range.
Now, since this range has such a high number of investors, a retest of it is probable to cause some reaction on the ETH price. But what kind of reaction would it be, support or resistance?
What decides this is the direction the price is retesting from. If the retest is from above, that is, these investors had been in profit just before the retest, then the market could feel some support.
This is because the holders might think this same price range could be profitable again in the future, so they might decide to participate in some accumulation at it.
Similarly, a retest from below could end up leading to resistance for Ethereum, as the investors might fear the asset dropping once more, so they could become more likely to sell.
Therefore, this huge range holding the cost basis of 5.85 million addresses should have acted as support for Ethereum during its latest retest. And indeed, since the retest, the asset has successfully found a rebound, as it has shot up towards higher levels.
As is visible in the chart, the ranges ahead up to the asset’s all-time high are all relatively thin with investors. This means that, thanks to the large support basis below, ETH shouldn’t have too much trouble traversing through these levels, at least in theory.
ETH Price
Since finding the rebound at the support range, Ethereum has climbed towards the $2,300 level.
Looks like ETH has been going up during the last couple of 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.
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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.
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