Key Points
- Ethereum [ETH] has seen moderate gains, however, it must stay above $2,300 to avoid mass sell-offs.
- 2.4 million addresses have purchased 52.6 million ETH tokens at $2,300, making it a crucial support level.
Ethereum [ETH] has followed a different trajectory to Bitcoin in the past week, registering moderate gains on its monthly price charts.
Currently, Ethereum is trading at $2,404, marking a 1.06% increase on the weekly charts and also gaining on the daily charts.
ETH’s Key Support Level
Despite these gains, Ethereum remains significantly below its recent high of $2,700 and 50.7% from its all-time high of $4,878. Crypto analyst Ali Martinez has highlighted that $2,300 is the key support level for Ethereum.
Martinez’s analysis points to the 2.4 million addresses that purchased 52.6 million ETH tokens at $2,300. He believes Ethereum must hold above this level to avoid a mass sell-off.
Potential Market Sell-off
If Ethereum fails to hold this demand zone, it could trigger a mass sell-off as investors try to minimize losses, leading to increased selling pressure and driving prices down.
Ethereum’s Exchange Supply ratio has recently increased from 0.143 to 0.1443, suggesting that holders may be preparing to sell or take profits. This is typically a bearish signal as investors move their ETH from private wallets to exchanges.
Furthermore, Ethereum’s Exchange Reserve has been increasing throughout the week, reaching $18.7 million at press time. This supports the observation that investors are transferring their ETH to exchanges, potentially leading to selling pressure and pushing prices down.
Ethereum’s MVRV long/short difference has remained negative over the past month. This indicates that long-term holders are seeing losses while short-term holders are profitable, potentially leading to long-term holder capitulation and greater selling pressure.
According to an analysis, Ethereum has been trading within a multi-month descending channel. Accompanied by negative market sentiment, Ethereum could decline before a breakout from this trend. If it sees a pullback, Ethereum will find the net support at $2,325.
