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Home Ethereum

Ethereum On-Chain Demand Should Sustain ETH Above $4,000, IntoTheBlock Says

December 18, 2024
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Ethereum On-Chain Demand Should Sustain ETH Above $4,000, IntoTheBlock Says
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Este artículo también está disponible en español.

The market intelligence platform IntoTheBlock has revealed how Ethereum has built up strong on-chain demand zones that should keep it afloat above $4,000.

Ethereum Has Two Major Support Centers Just Below Current Price

In a new post on X, IntoTheBlock has discussed about how the on-chain demand zones for Ethereum are looking right now. Below is the chart shared by the analytics firm that shows the amount of supply that the investors bought at the price ranges near the current spot ETH value.

Ethereum Support Zones
Looks like there are two large zones under the current price of the asset | Source: IntoTheBlock on X

As is visible in the graph, the Ethereum price ranges up ahead have only small dots associated to them, meaning not much of the supply was last purchased at those levels.

It’s different for the price ranges below, however, with the $3,772 to $3,892 and $3,892 to $4,011 ranges in particular hosting the cost basis of a significant amount of addresses. In total, the investors purchased 7.2 million ETH (worth almost $28.4 billion at the current exchange rate) at these levels.

Related Reading

Demand zones are considered important in on-chain analysis due to how investor psychology tends to work out. For any holder, their cost basis is an important level, so they can be more likely to make a move when a retest of it occurs.

When this retest occurs from above (that is, the investor was in profit prior to it), the holder might decide to purchase more, thinking that the level would be profitable again in the near future. Similarly, investors who were in loss just before the retest might fear another decline, so they may sell at their break-even.

See also  Ethereum: Why major investors are holding on despite ETH's price rise

Naturally, these effects don’t matter for the market when only a few investors participate in the buying and selling, but visible fluctuations can appear when a large amount of holders are involved.

The aforementioned price ranges satisfy this condition, so it’s possible that Ethereum retesting them would produce a sizeable buying reaction in the market, which would end up providing support to the cryptocurrency.

During the past day, Ethereum has seen a slight dip into this region, so it now remains to be seen whether the high demand can push back the coin above $4,000 or not.

Related Reading

In some other news, the Ethereum Exchange Netflow has been negative since the beginning of this month, as IntoTheBlock has pointed out in another X post.

Ethereum Exchange Netflow
The trend in the ETH Exchange Netflow over the last month | Source: IntoTheBlock on X

The Exchange Netflow is an on-chain indicator that keeps track of the net amount of Ethereum that’s flowing into or out of the wallets associated with centralized exchanges. “Over 400k ETH have flowed out since December 1st, suggesting a trend of accumulation,” notes the analytics firm.

ETH Price

At the time of writing, Ethereum is trading around $3,950, up 10% over the last week.

Ethereum Price Chart
The price of the coin seems to have gone through a pullback in the past day | Source: ETHUSDT on TradingView

Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com

READ ALSO

Ethereum Looks Ready To Break Out Of 4-Year Consolidation, Analyst Says Price Will ‘Go Insane’

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Este artículo también está disponible en español.

The market intelligence platform IntoTheBlock has revealed how Ethereum has built up strong on-chain demand zones that should keep it afloat above $4,000.

See also  Ethereum's slow Q2: Will ETF approval and low supply drive prices up?

Ethereum Has Two Major Support Centers Just Below Current Price

In a new post on X, IntoTheBlock has discussed about how the on-chain demand zones for Ethereum are looking right now. Below is the chart shared by the analytics firm that shows the amount of supply that the investors bought at the price ranges near the current spot ETH value.

Ethereum Support Zones
Looks like there are two large zones under the current price of the asset | Source: IntoTheBlock on X

As is visible in the graph, the Ethereum price ranges up ahead have only small dots associated to them, meaning not much of the supply was last purchased at those levels.

It’s different for the price ranges below, however, with the $3,772 to $3,892 and $3,892 to $4,011 ranges in particular hosting the cost basis of a significant amount of addresses. In total, the investors purchased 7.2 million ETH (worth almost $28.4 billion at the current exchange rate) at these levels.

Related Reading

Demand zones are considered important in on-chain analysis due to how investor psychology tends to work out. For any holder, their cost basis is an important level, so they can be more likely to make a move when a retest of it occurs.

When this retest occurs from above (that is, the investor was in profit prior to it), the holder might decide to purchase more, thinking that the level would be profitable again in the near future. Similarly, investors who were in loss just before the retest might fear another decline, so they may sell at their break-even.

Naturally, these effects don’t matter for the market when only a few investors participate in the buying and selling, but visible fluctuations can appear when a large amount of holders are involved.

See also  CryptoPunks, BAYC lead NFT daily sales, put Ethereum on top

The aforementioned price ranges satisfy this condition, so it’s possible that Ethereum retesting them would produce a sizeable buying reaction in the market, which would end up providing support to the cryptocurrency.

During the past day, Ethereum has seen a slight dip into this region, so it now remains to be seen whether the high demand can push back the coin above $4,000 or not.

Related Reading

In some other news, the Ethereum Exchange Netflow has been negative since the beginning of this month, as IntoTheBlock has pointed out in another X post.

Ethereum Exchange Netflow
The trend in the ETH Exchange Netflow over the last month | Source: IntoTheBlock on X

The Exchange Netflow is an on-chain indicator that keeps track of the net amount of Ethereum that’s flowing into or out of the wallets associated with centralized exchanges. “Over 400k ETH have flowed out since December 1st, suggesting a trend of accumulation,” notes the analytics firm.

ETH Price

At the time of writing, Ethereum is trading around $3,950, up 10% over the last week.

Ethereum Price Chart
The price of the coin seems to have gone through a pullback in the past day | Source: ETHUSDT on TradingView

Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com

Tags: demandETHEthereumIntoTheBlockOnChainsustain

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