Ethereum's $4,000 Hurdle: Key Support Levels to Watch as Correction Looms
After a strong third quarter where it hit new all-time highs, Ethereum (ETH) has struggled to maintain its upward momentum in September. The cryptocurrency is currently grappling to reclaim the crucial psychological $4,000 support level, prompting concerns among investors and analysts about a potential deeper correction. On-chain data is now highlighting critical price points that could serve as the next lines of defense for the "king of altcoins."
Critical Support Zones Identified by On-Chain Data
Crypto analyst Ali Martinez recently pinpointed three significant support levels for Ethereum, drawing insights from the UTXO Realized Price Distribution (URPD) metric. The URPD metric is a powerful tool that quantifies the amount of cryptocurrency acquired at various price levels, effectively revealing where large cohorts of investors established their cost bases. These zones often transform into robust support or resistance areas, as investors who bought at these prices tend to "double down" and accumulate more when the price revisits their initial investment point, thereby buffering further declines.
What Happens if $4,000 Fails?
According to Martinez's analysis, if Ethereum cannot sustain a close above the $4,000 mark, its immediate support lies around $3,515. This level saw approximately 1.39 billion ETH coins purchased, indicating a substantial cluster of investor interest. Should this level fail to hold, the next major support is identified at $3,020, where an even larger volume of nearly 2.65 billion coins were acquired. The ultimate significant support, in a more severe downturn, is situated at $2,772, representing the cost basis for over 2.64 billion Ether tokens. As of writing, Ethereum trades near $3,994, showing minimal movement in the past 24 hours. However, its performance over the last week is concerning, with CoinGecko data indicating a drop of more than 10%, underscoring the importance of these identified support levels in preventing a more pronounced downturn.
