Defx Insights

Ethereum’s $1,890 Support Test: Mass Panic Ahead? 📉

Ethereums 1890 Support Test Mass Panic Ahead

Written by

Defx Intern

in

Market Overview

Ethereum (ETH) has entered a critical phase as the cryptocurrency faces mounting selling pressure, having declined 17.08% in the past week to reach lows of $2,104. While showing minor signs of recovery in recent hours, on-chain data suggests a potential further drop to key support levels.

This bearish momentum comes amid broader market uncertainty, with Ethereum’s crucial $2K support level being tested, raising concerns among investors and traders alike.

Cost Basis Distribution Analysis

According to prominent analytics firm Glassnode, the Cost Basis Distribution (CBD) metric has identified $1,890 as a crucial make-or-break level for Ethereum. This price point represents a significant accumulation zone where approximately 1.82 million ETH was acquired in August 2023.

Key Support Levels:

  • Immediate Support: $2,100 (500,000 ETH accumulated)
  • Major Support: $1,890 (1.82 million ETH accumulated)
  • Current Price: $2,250

Investor Behavior Analysis

A fascinating development in the market shows strong holder conviction. Despite the recent price decline, data indicates that investors who accumulated ETH in August 2023 have maintained or increased their positions, suggesting confidence in long-term appreciation.

SPONSORED

Trade Ethereum with up to 100x leverage and maximize your profit potential

Trade Now on Defx

Market Implications

The current market structure suggests a potential two-stage correction:

  1. Initial support test at $2,100
  2. Possible deeper correction to $1,890 if initial support fails

However, the increasing market activity, up 7.74% to $29.91 billion, indicates strong trader interest despite the bearish price action. This heightened activity could provide the momentum needed for a recovery if key support levels hold.

Looking Ahead

While the short-term outlook appears bearish, the accumulation patterns and holder behavior suggest strong fundamental support for Ethereum. Traders should watch the $2,100 level closely for initial signs of stabilization before any potential move to test the crucial $1,890 support.

Source: NewsBTC

More NEWS