Is Ethereum Reaching a Classic Support Level? Whales Continue to Accumulate
Ethereum briefly dipped to a critical support price, suggesting potential for a market bottom, with whale investors increasing their holdings.
Ethereum (ETH) recently fell to a significant low of $2,870 on Wednesday, testing an important support level on the blockchain that has historically indicated market bottoms.
According to an analysis by MAC_D, an expert in on-chain data, this price point marks a collection of the ‘realized price’ for both large and smaller investors, hinting at the possibility of a rebound forming, even as smaller investors divest.
A Notable Realized Price Zone Indicates a Potential Bottom
In a recent report on CryptoQuant, MAC_D pointed out that historically, such realized price areas have signaled major bottom formations, as long-term investors enter the market while short-term traders exit.
The market analyst noted that the latest drop below $2,900 was induced by a risk-averse sentiment prior to Nvidia’s earnings report, quickly followed by a bounce after the chipmaker outperformed expectations, positively affecting both U.S. stocks and crypto.
Interestingly, there’s a notable divergence in behavior, with smaller wallets liquidating their positions at lower prices, while larger wallets holding over 10,000 ETH have continued to accumulate as prices decline. MAC_D indicated that this change in supply—from frantic traders to larger, patient investors—is often observed in the later phases of a bottom formation.
Moreover, liquidation metrics suggest the waning of forced selling. Each subsequent local low appears to be accompanied by significantly fewer long liquidations, implying that overly leveraged buyers may have already exited the market. However, the rise in short positions suggests that a modest recovery could lead to short sellers being squeezed in a relatively thin order-book.
High Leverage and Key Liquidity Areas
Currently, Ethereum’s market performance has faced struggles. Its present value of approximately $3,020 per CoinGecko reflects a slight decrease of 1% over the past 24 hours, representing a nearly 15% drop in the last week and an alarming 22% over the past month.
At the same time, its estimated leverage ratio on Binance recently reached a peak of 0.5617, as the price fluctuated around $3,000. With both long and short traders actively participating while spot prices remain stable, analysts at Arab Chain warned that the market is building internal pressure and is increasingly susceptible to a sharp price movement in either direction.
Market watchers are also tracking nearby liquidity areas, which could serve as key indicators for the next price movement. Analyst Crypto Patel noted that Ethereum confirmed a ‘Break of Structure’ at $2,940, but highlighted a zone of price inefficiency, known as a ‘Fair Value Gap’, between $3,270 and $3,360. Filling this gap could necessitate a 14-15% increase from current levels.
