Ethereum’s native token, Ether (ETH), continues to struggle as it remains below the psychological threshold of $2,000. This dip below this critical level occurred on March 10 and marks a significant low since October 2023. The concern for traders is palpable, especially as the price of Ether has seen a loss in market value relative to other major altcoins. Notably, XRP reached its highest valuation against ETH in five years on March 15, raising questions about ETH’s future trajectory.
The pivotal query that investors face revolves around whether ETH can recover from its recent losses or if it will succumb to panic selling should prices dip below $1,900. According to data from IntoTheBlock, Ethereum holders accumulated approximately 3.56 million ETH in the range of $1,900 to $1,843, averaging a price of $1,871. This accumulation equates to a substantial support level projected at around $6.65 billion, potentially functioning as a bullish reversal zone for Ether.
However, should the price drop below $1,843, there is an escalating risk of capitulation — a market reaction characterized by panic selling among investors during sharp corrections. If ETH remains below the $1,843 mark for a prolonged period, the potential for a deeper market correction rises significantly. The volume and size of ETH accumulation diminish noticeably beneath this threshold, highlighting the essential nature of the $1,900 to $1,843 support range.
Moreover, the percentage of Ethereum addresses in profit is at its lowest level since December 2022, hovering below 46%. Historical data shows that a low percentage of profitable addresses often coincides with price bottoms for Ethereum. Given the current high accumulation levels and fewer profitable addresses, these indicators could present bullish signals. Thus, the probability of Ethereum maintaining prices below $1,843 long-term appears to be decreasing.
Hitesh Malviya, founder of DYOR crypto, emphasizes that now is not the time to be bearish on ETH. On an X post, he pointed out the notable growth of real-world assets (RWAs), which witnessed a 50.9% rise over the past month and a staggering 850% increase year-on-year. Ethereum and ZKsync are capitalizing on over 80% of this burgeoning market.
On another front, Alphractal highlights the current market sentiment through the long/short ratio, which reflects the balance of futures traders betting on price increases versus those anticipating decreases. Their analysis reveals that larger investors are favoring long positions, while smaller investors are currently engaged in deleveraging — the process of unwinding high-risk, borrowed positions. With the long/short ratio sitting at 1.3, it indicates a cautious and balanced market environment.
In summary, the current scenario surrounding Ethereum reflects a precarious balance of optimism and caution. With volatility levels low and significant investor hesitance in leveraging, traders may find themselves in a waiting game, hoping for more favorable conditions to emerge.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
