In line with its bearish market structure, Ethereum price saw serious difficulties during the first week of February. The value of the cryptocurrency fell more than 30% during the week, falling to $1,850 on Friday, February 6. Amid the Ethereum market downturn, an important development has emerged – one that could make or break the world’s second-largest cryptocurrency.
Ethereum Violates Realized Price Across All Investor Cohorts
In a recent article on Quicktake, on-chain analyst MorenoDV shared a shocking development within the Ethereum network. The analyst pointed out that the price of Ethereum has recently fallen below the cost base of several investor groups.
The revelation is based on the Equilibrium Cohort Realized Price metric, which monitors the average on-chain cost base of Ethereum holders. The metric groups these investors by portfolio size, showing where these cohorts are holding profits or experiencing losses.
In the chart above, we see the Ethereum price breaking below multiple cost bases (represented by yellow, green, blue, and purple lines). Most striking, however, is the loss in realized price of the largest holders (with 100,000 ETH and above stored), which amounts to around $2,074.
Historically, the realized price of this class of investors (with more than 100,000 ETH in portfolio) has played a dual role for the price of Ethereum, depending on its trajectory. According to price movement data from 2019, mid-2020 and late 2022, the price realized by whales generally plays a role of formidable price resistance during downtrends; during uptrends, it provides reliable support.
Therefore, when the Ethereum price crosses the bearish whale realized price, MorenoDV explained that two potential paths usually emerge. In his words: “either a violent rebound as the level shifts towards support (2020, 2022), or a new capitulation towards multi-year lows (2018-2019). »
Key ETH Price Levels to Watch
Given that the price of Ethereum has crossed the prices realized by all investor cohorts at the same time, there is something to note here. MorenoDV highlighted that small holders collectively have their prices realized between $2,534 and $2,675.
Thus, if Ethereum price attempts to reclaim previous stages, the $2,534 to $2,675 price range will pose significant resistance to this effort. However, the aforementioned range is not the most critical for the Ethereum price.
The analyst pointed out that the price realized by the whale cohort, which is around $2,074, is the most critical for the Ethereum price. Based on previous extrapolations, a recovery of this level would likely follow historical trends and push prices higher, while failure to regain this level within 30 to 45 days would precede significant declines.
In the event that the latter scenario comes true, the price of Ethereum could quickly fall to $1,800 or even lower. If the price falls below $1,800 and sustains below this level, MorenoDV hypothesizes that it could drive Ethereum to the $1,600-$1,300 levels.
At the time of writing, Ethereum stands at a valuation of $2,030, reflecting a rise of over 7% in the last 24 hours.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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