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    Ethereum price could suffer setback to $2,000 according to bearish on-chain metrics

    Source Fxstreet
    Jan 22, 2024 13:00
    • Ethereum is currently in a key demand zone, a drop below the $2,300 level could result in further decline in ETH. 
    • Ethereum whales are likely realizing profits, profit-taking could push ETH lower, according to on-chain metrics. 
    • ETH volume has been on a decline since January 20, alongside Ethereum price drop, supporting a bearish thesis for the altcoin.

    Ethereum is trading at $2,372 on Monday. This puts the altcoin in a key demand zone. In the event that Ethereum price drops below the demand zone, the altcoin is likely to suffer a setback to $2,000. 

    On-chain metrics for the altcoin are flashing neutral to bearish signals, as seen on Santiment.

    Also read: BlackRock steers clear of XRP ETF launch amidst SEC v. Ripple lawsuit

    Ethereum sits in demand zone, ETH price move could determine direction of trend

    According to data from crypto intelligence tracker IntoTheBlock, Ethereum price is in the demand zone between $2,368 to $2,373. A drop below this area could see Ethereum price drop to the zone between $2,010 and $2,082, since there is no significant barrier in the path, as seen in the chart below. 

    On the other hand, if ETH price rallies, it faces resistance at the $2,440 level. The zone between $2,373 and $2,440 is where 903,110 ETH addresses scooped up 4.73 million Ether. 

    ETH

    In/Out of the Money around price. Source: IntoTheBlock

    When the Network Realized Profit/Loss (NRPL) metric, which is used to track the profits realized by Ethereum holders, is combined with the whale transactions valued at $100,000 and higher, it could be assumed that large wallet investors are likely engaged in profit-taking.

    As seen in the Santiment chart, the spikes in whale transactions coincide with the profit-taking spikes in the NRPL metric. Profit-taking activities by large wallet investors typically increase selling pressure on the asset and drive prices lower. 

    ETH

    Ethereum NRPL and whale transactions. Source: Santiment

    Volume is another key metric used to track the on-chain activity of an asset. ETH volume has declined between January 10 and 22, according to Santiment data. Volume has dropped alongside a decline in ETH price. Dwindling volume and activity supports the thesis of a correction in the asset in the short-term. 

    ETH

    ETH Volume and price. Source: Santiment 

    Ethereum price lost around 4% in the past week. ETH price hit its 2024 peak of $2,715 on January 12 and corrected to $2,372, at the time of writing. 

    ETH

    ETH/USDT 1-day chart

    Disclaimer: For information purposes only. Past performance is not indicative of future results.
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