A crypto analyst has explained how the range around $2,000 could become a major Ethereum support base for years, making it not too late to buy ETH right now.
43.8 Million Ethereum Was Acquired Between $1,900 And $2,100
In a new post on X, analyst Ali has discussed about why Ethereum could still be worth getting into at this point. The analyst has cited data from the market intelligence platform IntoTheBlock to explain this, referring to the on-chain acquisition distribution of the cryptocurrency.
The data for the cost basis distribution of the asset | Source: @ali_charts on X
In the above graph, the dots represent the number of investors or addresses who bought their coins within the corresponding price range. Naturally, the larger the size of the dot, the more is the density of holders who bought inside the range.
It appears that out of all the price ranges that ETH has visited in its entire history, the $1,900 to $2,100 one hosts the cost basis of the largest number of holders.
ETH was just recently consolidating inside this range, and as trading occurred inside it, the investors slowly gained their cost basis there, which is why the range has now swelled so large.
Now, what relevance does this range have for Ethereum? To understand this, how investor psychology works must first be known. To any investor, their cost basis is a particular price level, as their profit-loss situation can flip when the asset’s spot price retests it.
Because of this reason, the holder might be more likely to show some kind of move when this retest takes place. If the investor had last been in profits, they might expect the same level to be profitable again, so they may just buy more.
A few investors doing such buying won’t make the market budge at all, but if a large number of investors bought inside the same tight range, the levels might just end up providing support to Ethereum should it make a retest.
The $1,900 to $2,100 buyers are obviously in profits, so this range, which hosts the cost basis of 5.85 million addresses who acquired 43.8 million ETH there, could show a major buying reaction if ETH dips towards it. Ali explains, “this range could become a significant support level for years ahead. So, it’s not too late to get in on ETH!”
In another post yesterday, the same analyst had posted the Ethereum weekly chart, noting that if ETH could secure a sustained candle close above the $2,150 mark, the asset could be set for some exciting uptrend.
ETH may be breaking out of the triangle | Source: @ali_charts on X
As is visible from the chart, the ETH weekly price could be breaking above an ascending triangle pattern. “Targets in sight? We could be looking at ETH marching towards $2,600, and possibly even soaring to $3,500!” says Ali.
Ethereum has enjoyed some fresh bullish momentum during the past few days as it has now soared above the $2,200 mark.
Looks like the price of the asset has been going up recently | Source: ETHUSD on TradingView
Featured image from Bastian Riccardi on Unsplash.com, charts from TradingView.com, IntoTheBlock.com