Ethereum Price Remains Steady Above Key Support — Could It Drop to $1,500?

A rapid surge of positive movement in the cryptocurrency market during the last weeks of April led to Ethereum finishing the month above $1,800. Nevertheless, the altcoin did not conclude the month with a profit, marking April as its fourth consecutive month of decline. Recent on-chain metrics indicate that Ethereum’s price remains above a vital support threshold, which may influence the altcoin’s direction in the forthcoming weeks.

ETH Price Could Drop to $1,772

In a post made on May 3, renowned crypto analyst Ali Martinez highlighted that Ethereum’s price is at a pivotal point that could determine its near-term prospects. According to the most recent on-chain analysis, there is a potential risk for the altcoin to drop to approximately $1,500 if this critical support level is breached in the coming days.

This analysis hinges on the average cost basis of numerous Ethereum investors. In cryptocurrency trading, cost-basis evaluation assesses the viability of a price level as support or resistance based on the trading volume of coins acquired by investors in that zone.

Additional Insights

The chart demonstrates that the size of the dots (both green and red) reflects the number of Ether tokens acquired at various price points. A larger circle indicates a greater total of tokens purchased within that price range, signaling a stronger support or resistance level.

Data from IntoTheBlock reveals that over 6.36 million ETH were bought by 4.5 million wallets within the price band of $1,772 to $1,824, with an average transaction price of $1,799. This substantial buying activity has established a significant support level just below the current market price.

Market analysts expect Ethereum to rebound when it reaches this price point. The reasoning is that as ETH nears $1,772, investors who have purchased around this level may choose to buy more tokens, helping to maintain the price above that support area.

Conversely, the chart indicates that the price levels just below the $1,772 support have seen considerably lower investor activity. This suggests that if $1,772 is breached, the Ethereum price could decline to around $1,500 without encountering significant support. Conversely, if the support holds, ETH could surge up to $2,100, as little resistance exists above this level.

Overview of Ethereum Price

At the time of this writing, ETH is trading at approximately $1,830, showing a near 1% increase over the last 24 hours.

Additional Insights

Featured image from iStock, chart from TradingView