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Market intelligence platform IntoTheBlock revealed how Ethereum has built strong on-chain demand zones that should keep it afloat above $4,000.
Ethereum has two major support positions just below the current price
In new mail On X, IntoTheBlock discussed what Ethereum’s on-chain demand zones look like right now. Below is the chart shared by the analytics firm that shows how much supply investors have bought at price ranges near the current spot value of ETH.
As can be seen in the chart, Ethereum’s forward price ranges only have small dots associated with them, meaning that not much supply was last purchased at those levels.
It varies for the price ranges below, with the $3,772 to $3,892 and $3,892 to $4,011 hosting ranges being particularly cost-effective for a large number of addresses. In total, investors bought 7.2 million Ethereum (worth approximately $28.4 billion at the current exchange rate) at these levels.
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Demand zones are important in On-chain analysis Because of the way investor psychology tends to work. For any pregnant woman, their Cost basis It is an important level, so they are likely to make a move when there is a retest of it.
When this retest occurs from above (i.e. the investor was making a profit before), the holder may decide to buy more, believing that the level will be profitable again in the near future. Likewise, investors who were at a loss just before the retest may fear another decline, so they may sell at breakeven.
Naturally, these effects do not matter to the market when only a few investors are involved in buying and selling, but pronounced fluctuations can appear when a large number of stockholders are involved.
The above price ranges meet this condition, so a retest of Ethereum could trigger a significant buying reaction in the market, which could ultimately provide support for the cryptocurrency.
Over the past day, Ethereum has seen a slight decline in this area, so it now remains to be seen whether or not high demand can push the coin above $4,000.
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And in some other news, Ethereum Netflo exchange It has been negative since the beginning of this month, as IntoTheBlock pointed out in another X mail.
Exchange Netflow is an on-chain indicator that tracks the net amount of Ethereum flowing into or out of wallets linked to centralized exchanges. “More than 400,000 ETH have flowed since December 1, indicating an accumulation trend,” the analytics firm notes.
Ethereum price
At the time of writing, Ethereum is trading at around $3,950, up 10% from last week.
Featured image by Dall-E, IntoTheBlock.com, chart from TradingView.com
