Ethereum Price Dip: Crucial Support Level at $2400?

Ethereum’s impressive May rally, exceeding 35% growth in just two weeks, has recently faltered. After a valiant push towards $2700, ETH has struggled to maintain momentum, dipping below the key $2500 psychological level. While a rebound from $2500 was observed mid-May, the weekend brought renewed bearish pressure.

On-Chain Analysis Reveals Key Support

Prominent crypto analyst Ali Martinez, leveraging on-chain data, pinpoints the next significant support zone for Ethereum. This analysis focuses on the average cost basis of numerous Ethereum investors, a metric revealing potential price support or resistance based on accumulated purchase volume at specific price points.

Data from Sentora (formerly IntoTheBlock) highlights a crucial support area between $2354 and $2430. Within this range, 2.64 million addresses hold 63.9 million ETH tokens, representing a substantial $153.04 billion investment at an average price of $2,395. The sheer volume of tokens acquired in this zone suggests robust support. If the price approaches $2400, buying pressure from investors defending their cost basis could significantly mitigate downward pressure.

Looking Ahead

While the on-chain data paints a somewhat optimistic picture, Ethereum needs to hold above the $2400 level. Failure to do so could trigger a further decline, potentially pushing the price towards $2200.

Current Price and Outlook

At the time of writing, ETH is trading around $2480, showing a slight 0.7% increase over the past 24 hours. However, the weekly performance reveals a nearly 4% decrease (data from CoinGecko).

The overall situation remains fluid, and careful monitoring of price action around the $2400 support zone is crucial for assessing Ethereum’s near-term trajectory.