After trading at the same support level over past couple of years, Ethereum price broke down, below $2K for the first time since late 2023.
Analysis of Ethereum’s long-term holders showed a great deal of concern as the current Net Unrealized Profit/Loss (NUPL) level stood at 0.38, indicating a shift from hope to fear.
Previously, NUPL levels of the same size had indicated significant corrections, such as in May 2022 when NUPL dropped below 0.35 and led to ETH dropping.
ETH long-term NUPL | Source: Glassnode
If the fear escalates and ETH could continue falling below current levels of support headed towards next major supports, which will offer be long-term buying opportunities.
But if the mood is better and NUPL returns to 0.45, ETH can retest levels above $2,500, with possible retest of levels above $3,000 in a continuation pattern.
The NUPL readings confirmed the market indecision, price being at a key level.
Another fall will confirm capitulation, but staying here may lead to a new rally.
Ethereum Price Breaking Long-term Support Level
Ethereum’s price breakdown dented investor confidence as points of historic support failed to sustain.
However, ETH was supported at around $1,950, the October 2023 retest of breakout, which is still in place.
The $2K-$2.1K range is the key range for a reversal on the larger timeframes.
If ETH is able to reclaim this range, momentum should take it up to $2,400-$2,500, rendering short-term bearish concerns moot.
ETH/USD 3-day chart | Source: Trading View
Failing to hold above $2K, however, can leave ETH open to further weakness, with $1,750 the next significant test.
A break down below $1,750 would more emphatically put in motion a serious correction, one that could reach the $1,500-$1,600 levels not seen since early 2023.
The region of $1,750-$2,100 is an awkward battleground range where price action is indeterminate.
Reloading $2K+ signals bullish momentum, but slipping below $1,750 could trigger hasty liquidations, which adds to bear momentum.
Meanwhile, Ethereum price finds itself in the clutches of reclaiming $2K. Turnaround already looms large if so.
Otherwise, below-$1,750 ETH also a strong chance threat, constructing a bear trend lower.
Historical ETH’s Performances for Q1
This comes as ETH is set to finish its worst Q1 ever, reflecting dire investor fears.
ETH has traditionally had excellent Q1 performances, such as 2021 with +120% and 2020 had +21%, while 2022 provided a modest loss.
Q1 2024 has been very different, with ETH struggling to get back to key levels.
Now, ETH has experienced a double-digit decline, an aberration of the prior years’ bull runs.
January, February, and March three-month rolling performance showed ongoing weakness, with failed breakouts and increasing selling pressure.
ETH monthly returns | Source: Coinglass
ETH ending Q1 in the red will be the first in history with such a sharp beginning.
This suggests bearish sentiment for Q2 unless ETH reverses higher above $2,100.
Otherwise, the stage is set for the testing of $1,750, confirming a long-term bearish trend.
However, if ETH repeats historical Q2 reversals like 2020 with a +55% bounce in April, then there is still room for a recovery.
The next few weeks will determine if ETH bounces back or if below $1,750 is a certainty.
