The quick burst of bullish momentum in the crypto market in the closing weeks of April saw the Ethereum price close the month above $1,800. However, the altcoin failed to end the month in profit, marking April as its fourth consecutive month with negative performance. Current on-chain data indicates that the Ethereum price is now hovering above a crucial support level that could determine its trajectory in the upcoming weeks.
ETH Price At Risk Of Falling To $1,772
In a May 3 post on the X platform, prominent crypto analyst Ali Martinez revealed that Ethereum might be at a pivotal point that could dictate its short-term future. According to the latest on-chain metrics, there is a risk of the altcoin plummeting to approximately $1,500 if it breaches this critical support level in the coming days.
This on-chain analysis pivots around the average cost bases of various Ethereum investors. In the realm of crypto trading, cost-basis analysis is crucial as it helps ascertain a price level’s ability to act as support or resistance based on the volume of coins acquired by investors within specific price ranges.
The attached chart demonstrates that the size of the dots (green and red) corresponds directly to the number of Ether tokens purchased within a specific price region. The larger the circle, the greater the volume of tokens acquired in and around that price zone, thus indicating a more robust support or resistance level.
Insights from IntoTheBlock reveal that over 6.36 million ETH tokens were purchased by 4.5 million addresses within the $1,772 to $1,824 price range, with an average acquisition price of $1,799. As established, the high buying activity in this range has resulted in the establishment of a major support level just under the current price.
When the Ethereum price approaches this level, a rebound is anticipated. The reasoning behind this expectation is that, as the ETH price retraces to around $1,772, investors with cost bases near this area are likely to bolster their positions by purchasing additional tokens, aiding the price in remaining above the support region.
However, the previous chart shows that price levels below the $1,772 support have seen considerably less investor activity. This indicates that should the price fall beneath this support, it could descend to approximately $1,500 without encountering significant buying interest. Conversely, if the support level holds, the price of ETH could climb as high as $2,100, as there appears to be little resistance ahead.
Ethereum Price At A Glance
As this post goes live, the ETH token is valued at around $1,830, reflecting an approximate 1% increase in the past 24 hours.
