On-chain data suggests that Ethereum faces substantial resistance at the $3,500 price level as the price retreats from the threshold.
IntoTheBlock shared details on Monday that show the above price point continues to prove tough for Ethereum (ETH) bulls since July 16.
At the time of writing, ETH is hovering around $3,448 and has slipped 1.8% in the past 24 hours, retreating from intraday highs above $3,560. But why is the $3,500 to $3,600 price level likely to be a major supply wall for Ethereum?
Per IntoTheBlock, the main factor aiding bears around this zone is the 3.13 million Ethereum addresses that purchased the coins. In total, these addresses snapped more than 1.56 million ETH at prices at the average price purchase price of $3,547.
ETH addresses in loss could sell
While the overall sentiment is bullish for crypto, the potential that addresses acquired coins at or above the $3,500 level may fancy break-even or profitable trades.
“These addresses are holding at a loss, adding to the selling pressure and making it difficult for ETH to break through this key level,” analysts at the on-chain data and market intelligence platform said.
Also notable is that 84% of ETH holders are currently profitable, with about 5% at the money and only 11% out of the money. However, positive sentiment is still tinged with a bearish signal from the derivatives market, where the futures momentum gauge reads bearish with a value of -0.5.
Ethereum Faces Critical Resistance at $3,500
Since July 16th, Ethereum (ETH) has been struggling to surpass the $3,500 resistance level. A major factor contributing to this challenge is the 3.13 million addresses that purchased ETH at an average price of $3,547.
These… pic.twitter.com/iUOuXtToKq
— IntoTheBlock (@intotheblock) July 22, 2024
Ethereum spot ETFs could be a factor
Despite Ethereum’s price struggling at the current level, the market is more bullish as it awaits the debut of spot ETH ETFs.
After issuers filed final S-1 registration statements last week, including details such as fees, the trading debut will be this week. Experts have pointed to a potential launch on July 23.
Recently, analyst Rekt Capital noted a macro bull flag for Ethereum, highlighting that this pattern indicates trend continuation. This means the $4,000 threshold may not be out of reach for bulls much longer.
Crypto analyst Moon Carl pointed to a bullish inverse head-and-shoulder pattern on July 21. If this pattern plays out, the analyst believes ETH can target $4,300 in the short term.
On the downside, the immediate support level is around the $3,449 to $3,390 range.