Etheruem is currently poised around its All-time high once again. Though Bitcoin is still a long way from breaking the $60805 mark.
However, amid ETH’s strong technological traction and entry into price discovery, on-chain research reveals that its support is narrow than Bitcoin’s.
The Chief Economist at Chainalysis Phillip Gradwell has told that Ethereum price has narrower support near its ATH compared to Bitcoin. And if the market corrects, the next major ETH support level is around $1800.
“The Etheruem price reached a new all-time high this week but cost curve analysis suggests the peak Ethereum price has a narrower base of support than the peak bitcoin price, with the next strongest level of observed demand for Etheruem at $1800.”
He explains based on the accumulation trend of Etheruem. He further says if the prices face a correction plunging below the support level of $1800, the next “particularly strong” level for Eth will be $1500.
In case it plunges to $1500 it will account for a 30% downtrend from the current price of $2100.
However, previously a 30% pullbacks have been witnessed during bull cycles. Although since 2017 not many 20 to 30% pullbacks have occurred.
Why narrow support?
The main reason behind Etheruem having narrow support could be a lesser number of long-time Hodlers.
Gradwell says, such a pattern compliments the notion that ETH has a smaller support base than the mogul Bitcoin has. The economist in 2017 had found that only a small group of investors continued to hold ETH despite significant losses.
He also said,
“The ETH market has changed radically in recent months, with a significant increase in the cost of acquisition for over 50 million ETH, out of total supply of 11.5 M. Support at $1500 is particularly strong, with 33.3M ETH acquired above this level at a cost of $58 Billion.”
However, traders still expect Etheruem to continue rising above its ATH in the short term, despite narrow support. Also, Glassnode reported that the hash rate of the Etheruem has hit a new all-time high.