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The crypto market is currently down, showing no sign of recovery; however, Ethereum’s current on-chain movement suggests the decline might be mild.
On Tuesday, Jan. 20, crypto analyst Ali Martinez disclosed Ethereum’s on-chain data, which points to a critical price zone that could shape its next major move.
Ethereum forms support near $3100
Ali shared data from Glassnode, which revealed that a bulk of recent Ethereum activity is clustered between $3,119 and $2,772. This means that there was heavy Ethereum accumulation within the specified range.
Notably, it appears that a large portion of ETH holders last acquired the asset around the $2,772 and $3,119 levels, effectively turning the zone into a key area of support.
Usually, it has been observed that when price revisits regions where many investors bought in, selling pressure often eases, as holders become reluctant to exit the market at a loss.
Instead of selling at these levels, buyers often step in to defend their positions, thereby causing the price to become stable.
What’s next for Ethereum?
While Ethereum’s recent price movements have mimicked the negative trend seen across the broader crypto market, analysts are optimistic that the price will not fall below the aforementioned level before the next rally kicks off.
Commentators have expressed confidence that as long as ETH remains above or within the $2,772 and $3,119 range, downside risk appears limited. It is quite possible that moves from buyers could offset potential sell-offs.
Furthermore, the analyst hinted that a sustained hold above the zone near $3,119 could strengthen bullish momentum and open the door for further upside movement.
On the other hand, a decisive slump below $2,772, coupled with consistent outflows from Ethereum ETFs, could weaken the support, potentially exposing Ethereum to a deeper price correction.
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