Ethereum has been grappling with significant bearish pressure, mirroring the broader fragility of the cryptocurrency market. Over the past week, the altcoin has shed nearly 20% of its value, falling below the crucial $3,000 mark since January 29th. As the market continues to signal potential further downsides, the extent of Ethereum's decline remains uncertain. However, recent on-chain data offers vital insights into the next critical support levels for the second-largest cryptocurrency.
Major Drop and Key Support Levels
On-Chain Analysis Reveals Crucial Zones
Crypto analyst Ali Martinez, leveraging Glassnode's UTXO Realized Price Distribution (URPD) metric, has pinpointed the next three significant on-chain support levels for Ethereum. The URPD metric helps identify strong resistance and support levels by analyzing investor cost bases—the actual price at which investors acquired their coins. Typically, a price level with a high concentration of investor cost bases acts as strong support, as these investors are likely to "double down" on their positions, buying more to average down their costs. Following its drop below $2,772, Ethereum has since breached both the $2,623 and $2,475 support levels. If these levels had held, increased buying activity from existing investors looking to expand their holdings was anticipated, providing a buffer against further declines. The failure to hold these points suggests a deeper test of investor conviction.
Current Price Action and Future Outlook
As of the latest data, Ethereum's price stands around $2,410, marking an over 10% decline within the last 24 hours. The altcoin is currently hovering just below the $2,475 support cushion. Should ETH fail to sustain above this level, it could trigger a more substantial downturn. Analysts warn that a sustained break below $2,475 could see the Ethereum price plummet to as low as $1,881. Such a drop would represent a 25% decrease from the current price point and a staggering over 60% correction from its cycle high. The coming days will be critical in determining if Ethereum can find solid footing or if it is destined for further retracement.
