Ethereum price faces a major supply wall at $3.5k

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As a seasoned researcher with extensive experience in analyzing cryptocurrency markets and on-chain data, I’ve closely followed Ethereum’s price action and have taken note of the significant resistance it faces at the $3,500 level. Based on my analysis of the available data, I believe this price point poses a considerable challenge for Ethereum bulls due to several reasons.

Based on the information recorded on the Ethereum blockchain, there appears to be significant opposition to the cryptocurrency at the $3,500 mark as its value pulls back from that point.

On Monday, IntoTheBlock disclosed information indicating that the mentioned price level has been a challenge for Ethereum (ETH) buyers since July 16.

Currently, Ethereum (ETH) is priced around $3,448, representing a 1.8% decrease in the last 24 hours, falling short of intraday peaks at $3,560. The reason behind $3,500 to $3,600 acting as a significant resistance for Ethereum lies in its historical supply dynamics. This price range is where a substantial amount of ETH was previously sold, leading to an oversupply in the market and making it a challenging barrier for further price increases.

According to IntoTheBlock’s analysis, the primary reason contributing to the bearish sentiment in this area is the presence of approximately 3.13 million Ethereum holders who bought the coins. These buyers collectively purchased over 1.56 million ETH units at an average price of around $3,547 per coin.

ETH addresses in loss could sell

For those who bought cryptocurrencies when their prices were at or above $3,500, there’s a chance they might have reached the point of breaking even or making a profit with their investments, given the current bullish trend.

As an analyst at an on-chain data and market intelligence platform, I can tell you that the Ethereum addresses holding at a loss are contributing to the selling pressure, making it challenging for ETH to surmount this significant resistance level.

Approximately 84% of Ethereum (ETH) investors presently enjoy profits, while around 5% are at the breakeven point. Conversely, approximately 11% have incurred losses. Yet, optimistic views are somewhat tempered by pessimistic undertones from the derivatives sector. The futures momentum indicator there registers a bearish signal, with a value of -0.5.

Ethereum Encountering Significant Hurdle Near $3,500

— IntoTheBlock (@intotheblock) July 22, 2024

Ethereum spot ETFs could be a factor

Although Ethereum’s price is facing challenges at its present value, there’s a stronger optimistic outlook in the market due to the upcoming launch of spot Ethereum Exchange-Traded Funds (ETFs).

Last week, companies submitted their final registration statements for securities offerings, disclosing necessary details like fees. The securities are expected to begin trading as early as July 23.

Analyst Rekt Capital has identified a “macro bullish flag” for Ethereum in recent market analysis. This technical pattern suggests that the Ethereum price trend is likely to continue, potentially making the $4,000 threshold an achievable target for bulls soon.

Moon Carl, a cryptocurrency analyst, identified an inverse head-and-shoulders pattern for Ethereum on July 21st. Should this pattern unfold as expected, a price increase towards $4,300 could ensue for Ethereum in the near future.

#Ethereum has formed a Bullish Inverse Head & Shoulders.

🎯 Target: 4,300$

— The Moon (@TheMoonCarl) July 21, 2024

On the downside, the immediate support level is around the $3,449 to $3,390 range.

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2024-07-22 19:04