Ethereum Price Faces Crucial Test As Price Dips Below Holder Cost Basis

Ethereum price faces risks amid the recent price drops affecting the markets. As the larger market experienced a downturn, ETH price saw extreme lows much like the rest of the cryptos. Most cryptocurrencies have followed BTC price making lower yearly lows.

The price of Ethereum stands at $1,542.74, representing a major decrease under the $2,200 average purchase price of Ethereum holders.

Many Ethereum investors face net losses because their assets have fallen beneath the buying prices, demonstrating substantial capital loss throughout the Ethereum network.

Large-scale Ethereum holders with more than 100,000 tokens present an average cost basis of $1,290.

This specific price number stands strong because it defines a significant support boundary. This is where Ethereum may reach in case its price slides.

The market demonstrated signs of recovery in the Luna crisis of June 18, 2022, and other previous market downturns when Ethereum prices dropped to $870.

Previous market recoveries offer hope for stabilization and recovery when Ethereum prices reach these historical levels.

According to CoinMarketCap, the value of Ethereum decreased by 10.84% within one day to settle at $1,542.74.

The trading volume reached 552.31% higher while the market cap stood at $186.13 Billion due to substantial selling pressure.

The market value looks highly unstable which suggests short-term price declines could occur.

Technical Analysis of Ethereum Price Charts

According to the provided graphical data, the Ethereum markets displayed substantial price instability during the observed period.

Ethereum Data Chart | Source: CryptoQuant

According to the chart, the average price at which all Ethereum tokens are traded during market transactions is the essential indicator known as the realized price.

The black line depicts Ethereum market prices from current exchanges while they remain under the realized price value.

The realized price line is the main criterion for numerous holders to determine their maximum loss level.

Trade activity below the realized price indicates a current market situation of negative dynamics. This leads to losses for most Ethereum holders.

Ethereum’s current value position at its lowest end suggests additional downward price movement unless it initiates a price change.

The present price movements in this analysis reflect Ethereum’s current market stabilization.

However, they also hint at a forthcoming substantial shift based on market-wide trends.

ETH: Realized Price by Balance Cohorts Analysis

Other charts show Ethereum holders into distinct groups based on their balance size. This is the price realized by balance cohorts.

Realized prices reached higher levels among the holders, as shown by the green and purple lines, compared to the others.

Ethereum Data Chart | Source: CryptoQuant

The groups with Ethereum holdings between 1,000 and 100,000 have probably paid elevated asset prices based on their possession quantities.

Since Ethereum’s market value has dropped under the defined range, the holders of these levels now face losses in their asset positions.

Small Ethereum holders show evidence of holding assets at more expensive prices.

This indicates they might become more inclined to sell in response to additional market decreases.

This could thus push the market toward further decline.

However, not everyone is fearful of the dip. The sudden Hyperliquid 50X Whale appearance might mean some investors, if not all, are targeting a bounce.

As such, a whale has an open long on the whale’s $47 Million with significant leverage, which means that it is inevitable that ETH will either recover or stay at the price levels it currently trades.

The entry of a major market player tends to precede major price movements, and such large trades often precede large price reversals.

If the whale increases the price of Ethereum, this will change the sentiment in the broader market and cause other investors to follow the whale’s action.

Source