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The market intelligence platform IntoTheBlock revealed how Ethereum has created the most sought-after chain-chain locations that should keep it above $4,000.
Ethereum Has Two Major Support Centers Under Current Price
In a new post on X, IntoTheBlock discussed what Ethereum’s on-chain demand areas look like right now. Below is a chart shared by the analytics company that shows the amount of assets purchased by investors in a price range close to the current spot price of ETH.
As can be seen in the graph, the leading Ethereum prices have only small dots associated with them, which means that there is not much supply that kept buying at those levels.
It differs from the price range below, however, at $3,772 to $3,892 and the $3,892 to $4,011 range mainly to handle the cost base of a significant number of addresses. In total, investors bought 7.2 million ETH (worth about $28.4 billion at the current exchange rate) at these levels.
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Demand zones are considered important in on-chain analysis because of how the psychology of investors often works. For any owner, their cost base is an important level, so they may be more likely to make a move at a reassessment.
When this revaluation occurs from above (that is, the investor was profitable before that), the owner may decide to buy more, assuming that the rate will be profitable again in the near future. Similarly, investors who had lost just before they were reassessed may fear another decline, so they may sell during their break.
Naturally, these results do not matter in a market where only a few investors participate in buying and selling, but a noticeable change can appear when a large number of owners are involved.
The price ranges mentioned above satisfy this condition, so it is possible that Ethereum retesting them can generate a large buying reaction in the market, which can eventually provide support to the cryptocurrency.
Over the past day, Ethereum has seen a slight dip in this region, so now it remains to be seen whether the strong demand can push the coin back above $4,000 or not.
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In other news, Ethereum Exchange Netflow has been negative since earlier this month, as IntoTheBlock pointed out in another X post.
Exchange Netflow is an on-chain indicator that tracks the amount of Ethereum money flowing into and out of wallets associated with centralized exchanges. “More than 400k ETH has been released since December 1st, suggesting an accumulation trend,” the analyst firm noted.
Trading currency of ETH
At the time of writing, Ethereum is trading around $3,950, up 10% over the past week.
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
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