Why Ethereum (ETH) has little chance of breaking above $2500 in the coming weeks
Date: 2023-07-17 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
This week, the price of Ethereum surpassed the $2000 mark for the first time since April 2023, approaching the average cost of staked ETH.
Activating the Shapella upgrade allowed investors to withdraw ETH locked on the Beacon Chain network. However, instead of selling the coins, holders chose to stake them again and wait for higher prices. Let's figure out what actions they will take as the price of Ethereum approaches their break-even point.
Ethereum Stakers Still Suffer Losses
According to a 2022 report by Glassnode, a significant portion of ETH locked in smart contracts was purchased at an average price of $2390. This information is confirmed by Coinmarketcap: the aggregator reported that 68% of staked coins are still at a loss.
However, given the fact that Ethereum has risen in price by 70% over the year, the price of the asset is approaching the break-even point. This suggests that it may face significant difficulties in overcoming the $2500 resistance level.
The activity of ETH users has noticeably decreased
The number of new addresses created on the Ethereum network has grown significantly over the past few months. However, despite this, the number of active blockchain users is experiencing a decline.
"Active" refers to unique addresses that transact as senders or recipients. The chart above suggests that their average monthly number was below the annual average – this means that a significant increase in the price of ETH is not expected in the near future.
The bulls are unlikely to have enough strength to break above $2500
As we noted above, a significant portion of ETH stakers purchased coins at an average price of $2390. If they decide to sell some of them as soon as they break even, the asset is unlikely to be able to overcome the $2500 mark even against the backdrop of strong bullish momentum.
Data from the analytical platform IntoTheBlock confirms this prediction. The graph shows that there are currently 7.3 million addresses holding 33.55 million Ethereum, purchased at an average price of $2365. This cohort of investors can significantly slow down growth or even provoke a pullback to the $1970 level.
The bulls will only gain control of the situation if ETH breaks above $3000. However, at this point, a wall of 9.2 million addresses will be waiting for them, which purchased 3.88 million coins at an average price of $ 3075 dollars and want to break even.
