The decline of Ethereum below its realized price indicates panic among holders of the second-largest cryptocurrency by market capitalization, historically serving as a bullish signal for the medium term. This is according to a report by CryptoQuant.
Analysts noted that this metric often acts as a strong level of support or resistance.
When the spot price falls below this benchmark, it puts most held coins “in the red.” In times of fear and uncertainty, characteristic of recent days, panic selling often occurs in the market.
This situation marks a capitulation phase, where investors lose confidence and begin to sell off the asset en masse. Historically, such moments occur at the end of downward trends.
Historically, every time ETH has fallen below its realized price, it has coincided with the formation of a long-term bottom.
These periods are invariably followed by a strong recovery, making them a strategic accumulation area for hodlers, experts emphasized. The accompanying chart illustrates these observations well.
According to specialists’ calculations, most hodlers are currently at a loss with an average purchase price of $2200.
By their calculations, the next major support level is $1290 (highlighted in orange), which coincides with the purchase price of 100,000 ETH.
“Even during the Terra crash on June 18, 2022, Ethereum formed a low at $870 and showed signs of a rebound,” — CryptoQuant recalled.
Developers have postponed the Pectra update on the network of the second-largest cryptocurrency by market capitalization to May 7.
Earlier, Standard Chartered revised down its forecast for Ethereum’s price in 2025 from $10,000 to $4,000, citing the growing influence of L2 solutions, particularly the Base platform.