Ethereum Approaches Whale Cost Basis: A Historic Test

Ethereum is currently trading above the $3,200 mark, as bull traders work to regain higher price levels. However, overall market sentiment remains uncertain, with many analysts suggesting the trend could lead to a bear market. A recent report from CryptoQuant highlights a significant indicator related to the cost basis of whale holders, which has historically marked crucial shifts in Ethereum's price trends.

Key Takeaways

Ethereum is trading above $3,200 as market bulls strive for higher resistance levels.
A report from CryptoQuant reveals an important historical indicator related to whale holdings.
This indicator has surfaced only four times in the last five years, marking significant turning points in Ethereum's trend.
The whale realized price currently stands near the $2,500 range, impacting Ethereum's long-term potential.
Ethereum faces critical resistance levels between $3,400 and $3,600, which could affect its upward momentum.

Ethereum Trades Near Whales' Cost Basis For The Fourth Time Since 2021 – Historic Test

Ethereum Nears Critical Whale Cost Basis

Ethereum is currently trading at levels above $3,200, with bullish traders aiming to elevate the price closer to higher resistance zones. However, the overall market mood is fragile, marked by lingering fear and uncertainty. Many analysts are cautioning that the market could be heading toward a potential bear phase. Amidst this volatility, important on-chain data is surfacing, suggesting that Ethereum may soon enter a new and significant phase.

A new report from CryptoQuant reveals a historical signal associated with the realized price of whales who possess more than 100,000 ETH. This metric tracks the average cost basis for the major holders of Ethereum, and it has only been significant a few times over the last five years. Each occurrence has marked crucial turning points in Ethereum’s overall trend, indicating either an end to a steep downtrend or the start of a strong recovery.

At present, Ethereum finds itself close to this critical threshold once more. With analysts divided in their opinions and market sentiment weakening, this whale realized price has emerged as a vital metric to follow. The level at which ETH either rebounds or breaks down could define the next major trend cycle for the cryptocurrency.

Whale Realized Price: A Key Indicator of Market Health

The CryptoQuant report underscores the relevance of Ethereum’s proximity to the whale realized price—particularly for those holding at least 100,000 ETH. Notably, ETH has been trading close to this level only four times in the past five years.

Ethereum Realized Price (Balance > 100K ETH) | Source: CryptoQuant

Two of these instances occurred during the capitulation phase of the 2022 bear market when selling pressure hit a peak and long-term confidence was put to the test. The other two instances have occurred this year, highlighting the unusual and cycle-defining nature of the current market environment.

What makes this metric particularly crucial is its historical dependability. Over the past five years, Ethereum has never traded below the realized price of these large whale holders. This price level has consistently acted as a structural support, indicating times when the largest and most strategically savvy holders refuse to take losses. Their actions often correspond with moments of significant undervaluation or market exhaustion.

Currently, the realized price sits in the vicinity of $2,500, putting Ethereum within reach of a level that has traditionally distinguished long-term accumulation zones from significant market trend shifts. If ETH can remain above this threshold, it would further suggest that major holders still see long-term value, despite the prevailing fear in the wider market.

Ethereum's Recovery Efforts Face Key Resistance

Technical analysis of Ethereum’s daily chart depicts a market trying to recover despite facing substantial resistance. After bouncing back from below the $2,900 level, ETH has managed to reclaim the $3,200 mark and is currently trading around $3,238. However, while this upward movement shows short-term strength, the overarching trend maintains an air of fragility.

ETH testing critical resistance level | Source: ETHUSDT chart on TradingView

The price confronts the 50-day moving average, which has long acted as a dynamic barrier since the peak in September. Although ETH briefly exceeded this level, it couldn’t hold the gains, indicating reluctance from buyers. Furthermore, the 100-day and 200-day moving averages remain significantly above the current price, presenting a major resistance zone between $3,400 and $3,600, an area where previous bullish endeavors have faltered.

From a structural perspective, ETH is forming what might be a higher low, but it still needs to produce a higher high to affirm a trend reversal. A definitive breakout above the $3,350 mark would bolster bullish momentum, while a drop below $3,150 could reopen pathways toward $3,000 and possibly lower support levels.

Featured image from ChatGPT, chart data from TradingView.com