Analysis of blockchain data reveals that Ethereum’s price has dipped below the average purchase price of most major investor groups, with one exception. Here’s a look at that critical price point.
Ethereum’s Last Line of Defense: Mega-Whale Support
In a recent CryptoQuant Quicktake, market observer MAC_D explored potential support levels for Ethereum’s price. The focus is on a specific variation of the Realized Price metric.
The “Realized Price” is a blockchain-based indicator that calculates the average cost at which a particular group of Ethereum holders acquired their ETH. If the current market price falls below this average, it signals that this group is, on average, holding at a loss. Conversely, a price above the Realized Price indicates a collective profit.
Monitoring investor cost basis is key in blockchain analytics, as shifts in profit or loss positions can often trigger significant trading activity.
The reaction – whether buying or selling – can depend on the direction from which the acquisition price level is retested. If the price approaches from above during a bullish phase, holders might see it as a buying opportunity, further strengthening support. This defends their initial purchase price.
On the other hand, holders previously facing losses might interpret a price surge as temporary and choose to sell to recover their original investment, avoiding a potential return to the red.
A particularly crucial level for Ethereum, and cryptocurrencies in general, is the Realized Price across the entire network. As shown in the chart, this overall average currently sits around $2,250 for ETH.
The chart illustrates that this level previously acted as a support for Ethereum, but its recent price decline has pushed it below this point. This signifies that the typical Ethereum holder is now experiencing a loss on their investment.
With this major level breached, focusing on the Realized Price of specific holder groups may identify the next potential support area. The following chart tracks this indicator for holders with 100-1,000 ETH, 1,000-10,000 ETH, 10,000-100,000 ETH, and over 100,000 ETH.
As the data reveals, the latest market downturn has pushed the majority of these groups into unprofitable territory. Currently, only the largest holders – those controlling over 100,000 ETH – remain in a profitable position.
During the 2022 bear market, Ethereum found support around the Realized Price of these massive whale investors. It’s possible this level could again prove significant for ETH’s price action.
Currently, this cohort’s average acquisition price stands at $1,290. Further price declines would be needed to test this level as a potential support.
ETH Price Update
As of this update, Ethereum is trading near $1,500, marking a decline of over 16% in the past 24 hours.