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IntoTheBlock explained how Ethereum could challenge its all-time high (ATH) based on the current on-chain cost-based distribution.
Ethereum has little resistance on the way to the new ATH
In new mail On X, market intelligence platform IntoTheBlock talked about On-chain cost distribution It’s similar to Ethereum at the moment. Below is the chart shared by the analytics company that shows the amount of coins bought by investors in each price range near the current range.
Looks like the levels ahead are relatively thin in terms of investor cost basis | Source: IntoTheBlock on X
From the chart, it appears that several ranges below ETH’s current spot value have a large dot associated with them, showing that a large number of investors bought at those levels, while there is only one dot for the levels above.
For any holder, its cost basis is naturally a level of interest, as a potential retest of it could lead to fluctuation in the interest rate. Profit and loss situation. Therefore, when the price touches the level, it can be more likely to show some kind of reaction.
A small number of investors showing any kind of reaction is not enough to cause obvious market fluctuations, but when the cost basis of a large number of addresses is within a narrow range, as is the case with those large dots in a chart, a retest may result. The reaction is big enough to be relevant.
The extent to which investors react to a retest of their break-even mark depends on the direction from which the retest occurs. Investors who were at a loss before the retest may decide to sell out of fear that the price of Ethereum will fall again in the near future.
However, when a retest is done from above, stockholders may tend to believe that the price will rise again, so they can decide to engage in further accumulation.
Because of these buying and selling effects, large cost basis positions below the price are areas of support, while those above can be resistance blocks.
Currently, Ethereum has many of the former, but only one of the latter. “With only minor on-chain resistance levels ahead, ETH appears poised to challenge its previous all-time high,” notes IntoTheBlock.
And in some other news, ETH Financing rate It saw a rise to a multi-month high recently, as noted by an analyst at CryptoQuant Quicktake mail.
The trend in the ETH Funding Rate over the past year or so | Source: CryptoQuant
Funding Rate is an indicator that tracks the ratio between open long and short positions in the Ethereum derivatives market. The indicator currently has a noticeable positive value, indicating the dominance of bullish sentiment.
While some bullish mentality can be positive for bulls, too much of it can be a warning sign. It now remains to be seen whether ETH will be able to continue its work despite the high funding rate or whether it will notice a slowdown period first.
Ethereum price
At the time of writing, Ethereum is trading at around $3,900, up more than 7% over the past week.
The price of the coin seems to have been stuck in consolidation recently | Source: ETHUSDT on TradingView
Featured Image by Dall-E, CryptoQuant.com, IntoTheBlock.com, Chart by TradingView.com
