TLDR
- Ethereum price dropped below $2,000 support level, trading at around $1,904
- ETH fell below its 2-year realized price of $2,058.04, putting average investors underwater
- Only 47% of ETH holders remain in profit, according to CryptoRank
- Technical indicators suggest potential support in the $1,600-$1,800 range
- Major investor faced liquidation risk on 67,675 ETH worth $121.8 million
Ethereum has been on a wild ride over the past few weeks, with the second-largest cryptocurrency facing heavy downward pressure. The digital asset recently broke below the critical $2,000 support level that had held strong for most of 2024, sparking concerns among investors and traders alike.
At the time of writing, Ethereum is trading at $1,904. This represents a sharp decline from its recent highs. The cryptocurrency has seen extreme volatility, swinging between $1,760.94 and $2,006.69 in just 24 hours.
The current price action puts Ethereum in a weak position from a technical standpoint. The cryptocurrency is trading below both $1,950 and the 100-hourly Simple Moving Average. Analysts have identified a bearish trend line with resistance at $1,890 on the hourly chart.
For any recovery to gain momentum, Ethereum must clear several key resistance levels. These include $1,890 and $1,950. The $2,000 mark now represents a major hurdle that bulls need to overcome to reverse the current bearish trend.
Should ETH clear these barriers, especially the $2,000 resistance, it could potentially target higher levels. Some analysts suggest it might reach the $2,120 resistance zone or even $2,250 in the near term if buying pressure returns.
However, the path ahead appears challenging. If Ethereum fails to break above $1,890, another decline may be on the horizon. In this scenario, the next support levels to watch are $1,845, followed by the more critical $1,800 zone.
A concerning development for Ethereum investors is that the cryptocurrency has fallen below its realized price. This metric, which stands at approximately $2,058.04, represents the average acquisition price across all ETH holders.
The majority of Ethereum investors are currently underwater
This drop below the realized price is the first such occurrence in two years. It means that the majority of Ethereum investors are currently underwater on their investments, facing unrealized losses.
Data from Glassnode confirms this situation, showing that the Market Value to Realized Value (MVRV) ratio has declined to 0.93. This indicates that, on average, Ethereum investors are experiencing an unrealized loss of about 7%.
Historically, when cryptocurrencies trade below their realized price, investors tend to hold rather than sell at a loss. They typically wait for prices to recover. However, this situation also often leads to reduced buying activity, which can result in prolonged price stagnation.
Adding to the pressure, exchange data shows that Ethereum is experiencing large outflows. In a single day, a net 16,179 ETH (worth approximately $30 million) left exchanges. Fidelity alone withdrew 12,744 ETH, valued at around $23.61 million.
The market downturn has severely impacted investor profitability. According to CryptoRank, only 47% of ETH holders are currently in profit. This represents a sharp decline from earlier periods when the token was trading above $3,500 and most investors were seeing gains.
Some large investors are facing serious risks. Whale Alert recently flagged a major Ethereum investor who faced potential liquidation on 67,675 ETH (worth $121.8 million) when prices dipped below $1,800. To avoid this forced sell-off, they deposited additional collateral, but still faced challenges as prices continued to slide.
The short term outlook appears uncertain
From a technical analysis perspective, the immediate future for Ethereum appears uncertain. The hourly MACD indicator shows losing momentum in the bearish zone, while the RSI remains below the 50 level, suggesting continued downward pressure.
Analyst Ted Pillows suggests that Ethereum could be headed toward the $1,600-$1,800 range. This area has historically served as a major support zone, and holding these levels could potentially set the stage for a recovery.
Not all market observers are bearish, however. Trader Tardigrade has noted that ETH has reached a monthly oversold condition on the Stochastic indicator—a rare event that occurs approximately every three years. In the past, these oversold levels have often signaled major bottoms, followed by strong rebounds.
Despite the current market turmoil, some industry insiders remain optimistic about Ethereum’s long-term prospects. Ethereum co-founder Joe Lubin has expressed strong confidence in the token’s future, stating he has “perhaps never been more bullish” despite the current price action.
For now, Ethereum bulls face an uphill battle as they attempt to regain control. The cryptocurrency needs to first stabilize above $1,900 before attempting to reclaim the psychological $2,000 barrier.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
