The major Ethereum support area is $1,800 but weaker than Bitcoin‘s — analyst

The price of Ether (ETH) is hovering near its all-time high once again, while Bitcoin (BTC) is still far from surpassing its record high at $60,805.

But despite ETH demonstrating strong technical momentum and entering price discovery, on-chain analysis finds that its support isnarrowerthan Bitcoin.

Simplemente pon, ETH faces a bigger risk of seeing a deeper pullback than Bitcoin in the foreseeable future, if the market turns around.

USD cost of Ethereum held since November 2020. Fuente: Chainalysis, Phillip Gradwell

Why does Ethereum have a weaker support area than Bitcoin

Phillip Gradwell, the chief economist at Chainalysis, said that ETH price has narrower support near its record high compared to Bitcoin.

If the market corrects, the next major ETH support level, is around $1,800, Gradwell noted.

Based on the accumulation trend of ETH, Gradwell explained that the strongest level of demand is at $1,800. Él dijo:

The Ethereum price reached a new all time high this week but cost curve analysis suggests the peak Ethereum price has a narrower base of support than the peak bitcoin price, with the next strongest level of observed demand for Ethereum at $1,800.”

Gradwell used a data point calledthe USD cost of Ethereum held— which is similar to whale clusters for Bitcoin — to estimate at which price level investors accumulated ETH.

If the $1,800 support level gets broken and the market sees a sizable correction, the economist said that $1,500 es un “particularly strongnext level of support for ETH.

A drop to $1,500 would mean ETH would see a 30% drop from the current price of around $2,100.

Históricamente, 30% pullbacks occurred frequently during bull cycles, but in the recent cryptocurrency market uptrend, there has not been many 20% a 30% pullbacks compared to the run-up in 2017.

Sin embargo, Gradwell emphasized that $1,500 is the macro support level for ETH in the short to medium term. Añadió:

The ETH market has changed radically in recent months, with a significant increase in the cost of acquisition for over 50 million ETH, out of a total supply of 115M. Support at $1,500 is particularly strong, with 33.3M ETH acquired above this level at a total cost of $58 billion.

One key reason ETH might have a narrower support base than Bitcoin could be the small number of long-time HODLers.

After the peak in 2017, Gradwell found that a small cohort of investors held ETH despite seeing major losses.

The economist said that such a trend supports the concern that ETH has a weaker support base, at least relative to Bitcoin.

Traders expect ETH to continue rallying above ATH

A corto plazo, traders still expect ETH to see a broader uptrend despite the concerns for a narrow support base.

Un comerciante seudónimo conocido como “Bluntssaid that based on the bottoming out formation on the 4-hour chart, ETH would likely see another record high before BTC.

El comerciante dijo:

Looks like that was the $eth low. At this rate eth will be at ath before btc.

ETH/USD 4-hour price chart with key levels. Fuente: TradingView.com, Blunts

Atop the favorable technical market structure, según Glassnode, the hash rate of the Ethereum blockchain network has hit a new all-time high.

Por lo tanto, both fundamentals and price technicals suggest that the momentum of ETH price has a good chance of sustainability in the near term.

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Fuente: Cointelegraph

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