Ethereum (ETH) Faces No Resistance Until $3417, Opening the Path to the Mark

On-chain data suggests Ethereum doesn't face any dominant resistance levels until $3417, something that could open up the path to the mark.

In a new post on X, on-chain analytics firm Glassnode has looked at how the Cost Basis Distribution is now showing a critical level of resistance for Ethereum.

The “Cost Basis Distribution” is an indicator that shows the amount of an asset’s supply that was last purchased at a specific price. This indicator can be useful for gauging the potential support or resistance at various price tiers.

As displayed in the above graph, Ethereum has managed to break through a few notable supply levels with the latest price surge. Both the $2,700 and $2,740 levels hold the cost basis of about 1.3 million ETH, while the $2,760 mark holds that of 800,000 ETH. In on-chain analysis, levels concentrated with supply are considered important due to the investors reacting to price interactions with their cost basis.

When this retest occurs from below, the holders may react by selling their coins. As seen during the cryptocurrency winter, loss investors can be desperate to get back into the green, so when the price does return to their break-even, they can panic and exit out of fear that they will go back underwater in the near future.

Naturally, the more investors that share their cost basis at a particular level, the stronger this selling reaction tends to be. As such, levels above that hold a significant amount of supply can act as resistance barriers to ETH’s price. Ethereum was earlier stuck in the $2,500-$2,700 range for a month, potentially because of this resistance effect, but now the cryptocurrency has finally reclaimed them.

Just like how strong levels above can pose resistance, those below can be a center of support instead. As such, it’s possible that the role of the $2,700, $2,740, and $2,760 supply walls would now change. “These investors accumulated during consolidation and now will potentially form a strong support zone,” adds Glassnode.

The support effect can arise from holders carrying a bullish mindset and viewing declines to their cost basis as dip-buying opportunities, or simply from them wanting to protect their acquisition boundary.

Now, here is another chart shared by the analytics firm that shows how the Ethereum Cost Basis Distribution looks for the levels ahead of the latest spot value:

As the firm explains, “The levels ahead have a more uniform distribution of coins, with no extreme clusters until $3.42K, where 607,950 coins have their cost basis.”

Before this mark, the price levels have 200,000 to 400,000 ETH at every $50 gap. In comparison, the $3,417 level is where the majority of the cryptocurrency’s supply has its cost basis.

“If the $2.70K–$2.76K support range holds, the path to $3.42K remains technically open – but the response from holders in the $2.8K–$3.3K range will define how quickly ETH can climb – currently, it’s already 47.5% up QTD,” concludes Glassnode.