Recent on-chain data indicates that Ethereum has breached all significant investor cost basis levels, with one critical exception. This post delves into the important price level currently relevant to Ethereum and its implications for market participants.
Ethereum: Aligning with Mega Whales’ Realized Price
In a CryptoQuant Quicktake post, analyst MAC_D provided insights into where the next major support level for Ethereum could lie. This support level is identified through the Realized Price, an essential on-chain indicator that reflects the average cost basis of different investor cohorts within the ETH ecosystem.
The Realized Price effectively tracks the average price at which investors have acquired ETH. When this price is below the current market price, it indicates that the average investor is at a net loss. Conversely, when it is above the market price, the investor cohort enjoys net profits.
The significance of investor cost basis in on-chain analysis cannot be overstated, as it influences holders’ behavior in response to market fluctuations. For instance, when the price retests their acquisition levels from above, bullish investors may consider this a buying opportunity, leading to increased support for the asset. However, those who find themselves at a loss may decide to liquidate their positions to mitigate further declines.
Among the various cost basis levels, the Realized Price of the entire Ethereum network has emerged as particularly noteworthy. Current analyses position this level at approximately $2,250 for ETH.
As illustrated in the accompanying chart, this price level previously provided substantial support to Ethereum. However, recent declines have pushed the price significantly below this threshold, resulting in the majority of average holders now realizing noticeable losses.
With this critical support level breached, the Realized Prices of individual investor cohorts may play a key role in identifying potential new support zones. The following chart displays the trends among various investor classes, including those holding between 100 to 1,000 ETH, 1,000 to 10,000 ETH, 10,000 to 100,000 ETH, and over 100,000 ETH:
The data illustrates that three investor cohorts are currently underwater due to the recent price crash, leaving only the largest holders (those with over 100,000 ETH) in a profitable position.
During the bear market of 2022, Ethereum found support at the Realized Price associated with these large holders, suggesting that this price point may again become a critical benchmark moving forward.
As of now, this cohort’s average acquisition level stands at $1,290, indicating that further bearish movements are necessary before a retest can occur.
Current ETH Market Summary
At the time of writing, Ethereum is trading at approximately $1,500, reflecting a decline of more than 16% in the last 24 hours.
