Ethereum (ETH) Price At Risk Of Falling To $1,500 as New On-Chain Data Shows Buyers Are Warming Up

The quick burst of bullish momentum in the crypto market in the closing weeks of April saw the Ethereum price close the month above $1800. However, the altcoin failed to end the month in profit, making April its fourth consecutive month with a negative performance.

The crypto market experienced a brief surge of bullish momentum in the closing weeks of April, which saw the Ethereum price rise above the $1,800 mark by the end of the month. However, despite this rally, April ultimately closed with a slight loss for the altcoin, extending its streak of monthly declines to four.

As the new month kicks off, the Ethereum price appears to be pivoting above a crucial support level, which could play a key role in determining the altcoin's trajectory over the next few weeks.

ETH Price Could Fall To $1,772

In a May 3 post on X, prominent crypto analyst Ali Martinez revealed that the price of Ethereum might be at a critical juncture that could decide its short-term future. According to the latest on-chain data, the altcoin is at risk of falling to around $1,500 should it lose this support level in the coming days.

This on-chain evaluation of the Ethereum price revolves around the average cost bases of several Ethereum investors. In crypto trading, cost-basis analysis determines a price level's capacity to serve as support or resistance based on the volume of coins last acquired by investors in the region.

As shown in the above chart, the size of the dot (green and red) represents and directly corresponds to the number of Ether tokens bought within a price region. The larger the circle, the higher the amount of tokens bought in and around the price zone, and the stronger the resistance or support level.

According to data from IntoTheBlock, more than 6.36 million ETH tokens were purchased by 4.5 million addresses within the price range of $1,772 and $1,824 (at an average price of $1,799). As explained earlier, the high buying activity within this price zone has led to the formation of a major support level just beneath the current price.

The Ethereum price is expected to bounce back when it falls to this level. The rationale behind this expectation is that when the ETH price returns to around $1,772, investors with their cost bases in and around this level are likely to defend their positions by buying more tokens, helping the price to stay afloat the support region.

However, the highlighted chart shows that the price levels beneath the $1,772 support level have significantly less investor activity. This suggests that the Ethereum price could fall to around $1,500 without catching a break if $1,772 is breached. On the flip side, the price of ETH could travel to as high as $2,100 if this support level remains unbreached, as no significant resistance lies ahead.

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The post Ethereum Price Could See A "Massive" Drop To $1,500, Warns Analyst As ETH Pivots At Crucial Support appeared first on Chain Edge.output: