Ethereum Surpasses Its Active Cost Basis

Recent data from Cointelegraph Markets Pro and TradingView indicates that the price of Ether has seen a significant rise, hitting $3,650 on Sunday—a 20% increase from its four-month low of $3,050 recorded on November 4. This resurgence has been fueled by former President Trump's announcement of $2,000 tariff dividend payments, alongside increased optimism regarding the conclusion of the U.S. government shutdown. This upward movement has also pushed ETH above its active realized price, currently pegged at $3,545 according to Glassnode.

The fact that the average ETH holder has returned to profit after a previous period of unrealized losses is notably relieving for many, indicating a more bullish sentiment in the market. Historically, moving above this price level has shifted market sentiment from a position of fear, leading to reduced selling pressure among holders who were previously underwater and encouraging them to hold their investments.

The accompanying chart illustrates that after briefly dropping below the active realized price in January 2024, the price rallied an impressive 89%, climbing from $2,165 to $4,100.

Ethereum: Key pricing levels. Source: Glassnode

To maintain momentum, it is critical for the bulls to keep prices above $3,500, which would pave the way for a potential retest of the $4,000 mark. Other significant support levels for the ETH/USD pair are positioned around $2,870, $2,530, and $1,800, based on Ether's extreme deviation pricing bands.

Ethereum: Extreme deviation pricing bands. Source: Glassnode

Bears Prepare to Defend the $3,800 Price Point

Analysis of Ether’s cost basis distribution reveals that investors currently hold about 4.2 million ETH at an average cost ranging from $3,600 to $3,815, creating a potential resistance zone. This high concentration of holdings indicates that many investors may consider selling around breakeven, which could stall Ether's upward trajectory.

Ethereum cost basis distribution chart. Source: Glassnode

Traders have stated that for ETH to progress towards higher highs above $4,000, it must convert the resistance zone between $3,700 and $3,900 into support. Crypto analyst Ted Pillows highlighted this on Twitter, noting the failure of ETH to reclaim the $3,700 level, which has put downward pressure on the price.

ETH/USD daily chart. Source: Ted Pillows

Michael van de Poppe has also indicated that the ETH/USD pair needs to breach the $3,800-$3,900 region to ignite a move towards reaching all-time highs. Meanwhile, another analyst, Jelle, expressed a need for bulls to further intervene and prop up the ETH price to reach that $4,000 target.

In related news, Tom Lee's BitMine has ramped up its ETH accumulation, adding 110,288 Ether to its treasury valued at $12.5 billion, as it sets its sights on owning 5% of Ethereum's total supply.