IntoTheBlock, a renowned market intelligence platform, has highlighted how Ethereum’s robust on-chain demand zones are key to maintaining its value above $4,000.
Ethereum’s Strong Support Levels Just Beneath Its Present Price
In a recent update on X, IntoTheBlock provided insights into Ethereum’s current on-chain demand zones. They shared a chart that indicates the volume of ETH that investors acquired within price brackets close to Ethereum’s existing market value.
As the chart illustrates, there are minimal amounts of Ethereum bought at price levels above its current value, shown by small dots. This contrasts sharply with the ranges below, especially within the $3,772 to $3,892 and $3,892 to $4,011 zones, which hold the cost basis for many addresses. Altogether, these levels represent around 7.2 million ETH, or roughly $28.4 billion at today’s rate.
A Closer Look at Demand Zones
Demand zones are critical in on-chain analysis because they reveal investor sentiments. Investors are typically interested in their cost basis—knowing that these levels can sway their decisions upon retests. If the market retests a level from above (suggesting the investor was profiting), the investor might buy more, anticipating future gains. Conversely, if they were at a loss prior to retesting, they might sell at break-even out of caution.
These psychological dynamics become significant when they involve many investors, impacting the market visibly. The highlighted price zones meet this criteria, so a retest here could trigger a substantial buying response, reinforcing Ethereum’s market support.
Recently, Ethereum experienced a slight dip into these zones. The question now is whether this demand will be enough to lift Ethereum beyond the $4,000 threshold again.
Additional Observations
Additionally, IntoTheBlock reported that since the start of this month, Ethereum Exchange Netflow has been negative. This implies more ETH is leaving centralized exchange wallets than entering, indicative of an accumulation trend. Over 400,000 ETH have been withdrawn since early December.
Current Ethereum Price Position
Currently, Ethereum trades at around $3,950, reflecting a 10% increase over the past week.
Featured images courtesy of Dall-E, with analysis from IntoTheBlock.com and charts provided by TradingView.com.
