Following the bearish market structure, Ethereum price fell significantly in the first week of February. The cryptocurrency’s value has fallen by more than 30% in a week, plummeting to $1,850 on Friday, February 6th. Amid the downturn in the Ethereum market, a significant development has occurred that could determine the success or failure of the world’s second-largest cryptocurrency.
Ethereum violates realized prices for all investor cohorts
In a recent post on Quicktake, on-chain analyst MorenoDV shared a shocking development within the Ethereum network. Analysts highlighted that Ethereum price has recently fallen below the cost basis of multiple investor groups.
This exposure is based on realized price metrics by balance cohort that monitor the average on-chain cost base of Ethereum holders. This metric groups these investors by wallet size and shows whether these cohorts are holding at a profit or at a loss.
In the chart above, you can see the breakdown of Ethereum price under multiple cost bases (represented by the yellow, green, blue, and purple lines). But the most shocking thing is the realized price loss for the largest holders (those with over 100,000 ETH stored), amounting to approximately $2,074.
Historically, the realized price of this investor class (holdings of 100,000 ETH or more) has played a dual role on the Ethereum price depending on its trajectory. According to the price trend data of 2019, mid-2020, and late 2022, the whale’s realized price usually acts as a strong resistance to the price during a downtrend. Interestingly, during an uptrend, it acts as a reliable support.
Therefore, during times when the Ethereum price falls through the realized price, two potential paths typically emerge, MorenoDV explained. In his words, “Either there will be a strong rebound as levels turn into support (2020, 2022), or we will fall further to multi-year lows (2018-2019).”
Key ETH price levels to watch
Something worth noting here, as Ethereum price passed through the realized prices of all investor cohorts simultaneously. MorenoDV noted that the overall realized price for small holders ranged from $2,534 to $2,675.
Therefore, if Ethereum price attempts to regain its previous legs, the $2,534 to $2,675 price range will provide significant resistance to its efforts. However, the aforementioned range is not the most important range for Ethereum price.
Analysts emphasized that the realized price of the whale group, approximately $2,074, is the most important for Ethereum price. While a recovery at this level is likely to follow historical trends and push prices higher according to previous estimates, failure to regain this level within 30-45 days could precede a significant drawdown.
If the latter scenario holds true, the price of Ethereum could quickly fall to $1,800 or even lower. MorenoDV hypothesizes that if the price falls below $1,800 and sustains below this level, this could push Ethereum to the $1,600 to $1,300 level.
As of this writing, Ethereum is valued at $2,030, reflecting an increase of over 7% in the past 24 hours.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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