The price of Ethereum has been under intense downward pressure over the past few weeks, reflecting the overall fragile state of the cryptocurrency market. The altcoin has lost almost 20% of its value over the past week, falling below the psychological $3,000 level since Thursday, January 29.
While the market is still showing signs of further downside risk, it is unclear how far Ethereum price will fall in the current bearish setup. However, the latest on-chain data has offered a glimpse of the next critical levels for the second-largest cryptocurrency.
ETH’s next support at $2,475: Glassnode
In a recent article on Platform X, crypto analyst Ali Martinez identified the next three on-chain support levels for Ethereum price. This on-chain assessment centers around the UTXO Realized Price Distribution (URPD) metric, which helps identify strong levels of resistance and support based on investors’ cost bases.
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For more context, an investor’s cost basis refers to the actual price at which they purchased a particular cryptocurrency (Ethereum, in this scenario). Typically, the ability of a price level to function as a support or resistance zone on the chain depends on the number of investors whose cost base is at that level.
As we deduced earlier, the distribution of prices realized by UTXO tracks the amount of a particular cryptocurrency acquired at a specific price level. Now, price levels below the current spot value with significant trading activity are often considered major support zones, as shown in the chart below.
The reasoning behind this expectation is that investors whose costs are around these price levels are likely to double down on their positions and purchase more coins. This increased buying activity will therefore provide a cushion for the Ethereum price to stay afloat and potentially rebound.
Highlighting data from Glassnode, Martinez identified the $2,623, $2,475, and $1,881 levels as the next crucial support zones for Ethereum price after losing the $2,772 mark. However, it appears that the altcoin price has also lost the $2,623 and $2,475 supports following its latest decline over the weekend.
Ethereum Price Overview
At the time of writing, the ETH price stands at around $2,410, reflecting a decline of over 10% in the last 24 hours. With this latest decline, the altcoin price appears to be hovering around the support cushion, around $2,475.
If ETH’s hold below this support level continues, investors could see Ethereum price fall as low as $1,881. A drop of this magnitude would represent a 25% decline from the current price and a correction of over 60% from the cycle peak.
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Featured image from iStock, chart from TradingView
