Ethereum price faces a major supply wall at $3.5k

On-chain data shows that Ethereum is facing significant resistance at the $3,500 price level as its price pulls back from the threshold.

The above price point has remained challenging for Ethereum (ETH) bulls since July 16, IntoTheBlock reported on Monday.

At the time of writing, ETH is trading around $3,448 and has fallen 1.8% in the last 24 hours, having retreated from daily highs above $3,560. So why is it likely that the $3,500 to $3,600 price level will be a major supply wall for Ethereum?

According to IntoTheBlock, the main factor helping the bears in this region is the 3.13 million Ethereum addresses that purchased the coins. In total, these addresses snapped up over 1.56 million ETH at an average purchase price of $3,547.

Losing ETH addresses can be sold

Although the general sentiment towards cryptocurrencies is bullish, coins purchased at levels of $3,500 and above have the potential to avoid losses or make profitable trades.

“These addresses are holding at a loss, increasing selling pressure and making it difficult for ETH to breakout past this important level,” analysts at the on-chain data and market intelligence platform wrote.

It is also noteworthy that 84% of ETH holders are currently profitable, with about 5% in the money and only 11% out of the money. However, the positive sentiment is still colored by the bearish signal from the derivatives market, where the futures momentum indicator is bearish with a value of -0.5.

Ethereum Faces Critical Resistance at $3,500

Ethereum (ETH) has been struggling to surpass the $3,500 resistance level since July 16. A major factor contributing to this difficulty is the 3.13 million addresses purchasing ETH at an average price of $3,547.

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— IntoTheBlock (@intotheblock) July 22, 2024

Ethereum spot ETFs could be a factor

Although the price of Ethereum is struggling at its current levels, the market is more optimistic as it awaits the launch of spot ETH ETFs.

Trading is set to begin this week after issuers last week filed final S-1 registration statements that include details such as fees. Experts have pointed to a possible launch on July 23.

Recently, analyst Rekt Capital highlighted a macro bull flag for Ethereum, emphasizing that this pattern suggests a continuation of the trend. This means that the $4,000 threshold may not be out of reach for the bulls for much longer.

Crypto analyst Moon Carl pointed out a bullish inverse head-and-shoulders formation on July 21. The analyst believes that if this formation occurs, ETH could target $4,300 in the short term.

In the downward movement, the current support level is between $3,449-3,390.