Market intelligence platform IntoTheBlock has identified strong on-chain demand zones for Ethereum that are expected to support its price above $4,000.
Ethereum Shows Strong Support Levels Near Current Price
In a recent post on X, IntoTheBlock discussed the current on-chain demand zones for Ethereum. The chart shared by the analytics firm reveals the amount of supply that investors acquired at price levels close to the current value of ETH.
The chart indicates that the price ranges ahead have minimal associated supply, while the $3,772 to $4,011 ranges show significant investor activity. Investors have purchased 7.2 million ETH at these levels, totaling nearly $28.4 billion.
Understanding Demand Zones in On-Chain Analysis
Demand zones are crucial in on-chain analysis as they reflect investor psychology. When a retest of the cost basis occurs, holders may decide to buy more if they were previously in profit or sell if they were at a loss.
Large fluctuations can occur when a significant number of holders are involved, as seen in the mentioned price ranges. Ethereum retesting these levels could trigger a substantial buying reaction, providing support to the cryptocurrency.
Ethereum recently dipped into this region, indicating a test of high demand to push the price back above $4,000.
Ethereum Exchange Netflow and Price
IntoTheBlock noted a negative Ethereum Exchange Netflow since the beginning of the month, suggesting a trend of accumulation as over 400k ETH flowed out of exchanges.
Currently, Ethereum is trading around $3,950, showing a 10% increase over the past week.
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com