Funds holders’ data provides valuable insights into where Ethereum may find support to prevent its downward trend. Two network metrics indicate that sales pressure behind ETH has increased in recent weeks, but has not yet eased.
Ethereum (ETH) bulls found themselves in trouble earlier this month after failing to hold the demand area around $3.6 million.
The range of $3600 to $3650 was a resistance in March and the first half of April, but was broken through and turned into support in late May.
Speculation around Ethereum ETF took place in July, but with Bitcoin (BTC) facing selling pressure from miners and Mt. Gox, as well as a general lack of demand, Ethereum bulls may face a tough battle.
It is expected that the price will drop to the next support area, but where might the pullback stop?
Key support and resistance areas
AMBCrypto observed that data from IntoTheBlock shows a large amount of ETH was bought within the range of $2970 to $3171, totaling 2.28 million Ethereum.
As the price approaches this level, the number of coin holders will increase, making it difficult to break through this area.
Similarly, any price rebound will struggle to rise above $3.5 million, as many holders will be close to break-even at that price and may seek to sell due to the fearful situation.
Therefore, levels of $3.1 million and $3.5 million are to be watched in the coming weeks.
Active address count reflects network health positively
Despite the price decline, daily active addresses in June continue to trend upwards. An increase in active addresses is a good sign of network usage. However, deviations in other metrics are tolerable.
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In the past month, the average coin age has sharply decreased. This indicates movement of tokens within the network and distribution. The MVRV ratio has also dropped below zero, highlighting holders’ losses.
When combined, these are strong signs for further bearishness. MCA must start to rise to suggest a price recovery.
