Ethereum Investors Regain Profitability as ETH Price Enters Pivotal Zone for Potential $3,000 Breakout
Summary
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Return to Profitability and Bullish Signal: Ethereum’s recent rally to $2,700 has pushed the average ETH holder back into unrealized profit, a development Glassnode considers a bullish signal and a source of financial relief that could fuel further upward momentum.
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Key Price Levels and Resistance: ETH has surpassed its realized price ( 1,900) and True Market Mean (2,400), but faces critical resistance in the 2,400-2,900 range, with the Active Realized Price around $2,900 being a key hurdle for continued investor confidence.
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Significant Sell-Side Risk: A concentration of 2.27 million ETH held at an average cost basis of $2,767 poses a substantial sell-off risk near $2,800, as investors may look to exit at break-even, potentially stalling the rally.
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Technical Challenges and Catalysts: For sustained upside towards $4,000, ETH needs to flip $3,000 into support after breaking the 2,600-2,800 range (containing 50-day and 100-day SMAs); continued ETF inflows could act as a positive catalyst, while failure to hold support could lead to significant downside.
Ethereum’s recent upward price movement towards $2,700 has returned a significant number of investor cohorts to a profitable position.
This development enhances the prospects for a continued rally towards $3,000 and potentially higher levels, although a considerable risk of selling pressure persists near Ether’s recent range high.
Key On-Chain Metrics Signal Bullish Outlook
According to analysis from Glassnode, Ether’s surge to $2,700 on May 14 propelled its value above its realized price, indicating that the average Ethereum holder is currently in a state of unrealized profit.
This shift towards profitability for many holders offers significant financial relief and is generally interpreted as a bullish market signal.
Ethereum Surpasses Critical Cost Basis Levels Amid Pectra Upgrade Excitement
Data sourced from Cointelegraph Markets Pro and TradingView reveals that Ether’s price has appreciated by over 52%, rising from approximately $1,800 on May 7 to a three-month peak of $2,700 on May 14.
This rally, reportedly fueled by anticipation surrounding the Pectra upgrade, has pushed ETH above its realized price, or cost basis, which currently stands at $1,900.
This technical achievement clears a path for a potential advance towards $3,000 or beyond.
Historically, during the initial stages of a market rally, investors who are in profit tend to support upward momentum by maintaining their positions and attracting new capital.
Further analysis of the cost basis among active market participants underscores the strength of this recent upward movement, as the price has surpassed its True Market Mean (or Active-Investor Price) of $2,400.
This suggests fresh capital inflows at higher price points.
As previously noted by Cointelegraph, maintaining a position above $2,400 was considered crucial for a potential retest of the $3,000 level.
Navigating Key Resistance Zones for Sustained Momentum
Despite Ether’s recent strong performance, Glassnode analysts caution that the Active Realized Price, situated around $2,900, remains a key overhead resistance.
A decisive reclaim of this level is deemed necessary to bolster continued improvement in investor confidence regarding the altcoin.
The market intelligence firm further elaborated that the 2,400-2,900 range is a critical zone for Ethereum, functioning as both a resistance area and a potential breakout point essential for sustaining upward momentum.
Prominent trader Daan Crypto Trades also emphasized the necessity for ETH’s price to “convincingly break” out of the 2,400-2,600 range before attempting to overcome higher timeframe resistance between $2,800 and $2,850.
He stated, “Not looking to do much until we at least convincingly break out of this local range.”
Significant Sell-Side Risk at the $2,800 Level
Analysis of Ether’s cost basis distribution data reveals that approximately 2.27 million ETH are held by investors with an average cost basis of $2,767.
This concentration creates a substantial potential resistance zone, as many investors in this cohort might be inclined to sell their holdings at a break-even point, potentially impeding Ether’s upward price trajectory.
Technical Hurdles and Potential Catalysts
From a technical standpoint, for ETH to target higher highs above $4,000, it must first successfully convert the $3,000 resistance level into a support level.
Before that, the ETH/USD pair needs to achieve a sustained close above the 2,600-2,800 range, which is currently occupied by the 100-day and 50-day simple moving averages (SMAs).
Ether’s price fell below this critical range in February, influenced by a risk-off market sentiment following Trump’s tariff measures.
A potential positive catalyst for bullish sentiment could be continued demand from spot Ethereum ETFs.
Data from Farside Investors indicates that Ether ETFs have registered $100.7 million in net inflows over the last three days.
Downside Risks and Support Levels to Watch
Conversely, bearish market participants will likely attempt to defend the $2,600 resistance level to increase the probability of a price decline.
The immediate downside target is below the $2,400 level, which corresponds to the 200-day SMA.
Should the price fall below $2,400, the next significant area of interest for support lies between $2,200 and the psychological $2,000 mark.
A retracement to $1,800 would effectively nullify all gains made after the Pectra upgrade announcement.
*Disclaimer*: We at Bitcoinleef.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
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