Ethereum (ETH) investors have been very active in the past few weeks, managing their positions in the asset and showing a clear understanding of the market when it has been in a volatile state. After seeing a high at around $2,500 in early February, the price of ETH has tried to backtrack a few times but has continued to fall closer to its last low of around $2,050—a price not seen since November 2023. As the asset continues to price flip-flop, we have been using on-chain data to gain some additional insights into just how and why investors have been moving in and out of the asset during these last few weeks. Ethereum’s latest Cost Basis Distribution analysis reveals a dynamic capital movement across price levels and distinct investor behavior during this period. It shows that lower prices have not led to large market participants accumulating more ETH, clearly demonstrating that our previous thesis of “accumulation below $3K” was misguided. In fact, having ETH approach the $2K price point now looks like a price floor. Moreover, investors who initially acquired ETH at significantly higher prices seem to have sold into the recent rally. But in contrast to what much lower prices might otherwise suggest, having ETH not only previously accumulate but now look to have a price floor seems to have led to more selling. Key Investor Activity Amid Market Shifts Now, if we focus individually on each of the aforementioned three months, the allocation from the first month shows us that investors—who conducted their initial ETH purchases at or around the $3,500 price point—engaged substantially with both the local peak of $2,500 and also during the retracement to $2,050. During February, these ETH holders took advantage of the strategic buy situations. More importantly, they were also able to up their market-making game by lowering their exposure during the dip in a strategic buy moment of their own. All said and done, they now hold approximately 1.75 million ETH with an average cost basis of about $3,200. This positions management underlines a trend of Ethereum investors choosing risk-aware strategies. Many investors haven’t just sat around waiting for the market to do its thing; they’ve worked the market, using its fluctuations to help reduce their exposure to a price that’s seeming a bit too high for comfort. Besides indicating a possible top in the market, this also suggests Ethereum investors are getting better at tuning in to the market’s signals—for better or worse. At approximately 500,000 ETH at $2,200 on March 1, investors seized upon near-the-lower-end price movement to make the kind of accumulation that’s been the hall-mark of Ethereum investor action during this recent volatile period. The immediate subsequent movement in assets was up again in price, lighting up some kind of overvaluation radar, as it happens, that’s been the counterpoint to the kind of market dip-buying we’ve been talking about since the early part of this year. And as for the selling-as-overvaluation-signals market behavior? Can’t say we’re too surprised to see it being practiced by none other than Ethereum investors. Under the investor radar, Ethereum dips have been good buying opportunities. They seem to have netted gains on immediate term moves since. #Ethereum investors actively managed their exposure through this volatile period. After a rally to $2.5K, $ETH retraced to $2.05K – levels last seen in Nov 2023. Cost Basis Distribution (CBD) shows how capital rotated across price levels and who took advantage of the dip. pic.twitter.com/vl6AdghfRO — glassnode (@glassnode) March 5, 2025 Resistance Levels and Key Price Points to Watch Later, when I look ahead, the price levels around $2,800 have emerged as a crucial resistance point for Ethereum. On-chain data reveals that around 800,000 ETH has been accumulated at or near this price level, signaling a significant supply zone where selling pressure could increase should the price rise back toward these levels. This resistance zone will likely serve as a key point to watch during any potential recovery, as it could either mark a temporary ceiling for the price or serve as a launching pad for further gains if it is breached. The pile-up at $2,800 shows that a large chunk of investors have purchased ETH at that price, and as we get nearer to that price again, these folks might be more likely to sell than to buy, thus exerting downward pressure on Ethereum’s price, as these investors seek to pocket the profits that would seem to be theirs at $2,800. In effect, this situation creates a double bind: either ETH is stuck under $2,800, or it goes significantly past that price and somehow manages to hold. The actions of investors at reduced price levels continues to pique interest, though. Why? Because it’s one thing to be a buy-and-hold investor when the price is going up and quite another to not freak out when you see the price pull back. Accumulating, in this case, 500,000 ETH at $2,200 and then not freaking out when it was $1,900 but OMG WOWING it back at $2,500 and now at $3,500 is kind of an impressive feat of emotional stability. But it also raises two questions: Why are these not-very-affluent investors buying during downturns and then selling during upswings? And how is it that sell orders for these supposedly profit-taking trades seem to coincide with price increases? Long-Term Outlook for Ethereum While the wider cryptocurrency market is blowing hot and cold, Ethereum stays close to the center. Consequently, its price is what most of us are looking at, and not just us plebeians, but also the big boys in the space (or what passes for “the big boys” in this still-nascent industry). Unlike a year or so back, when lots of folks talked up Ethereum’s being the next bitcoin, Ethereum seems to have settled back to being a cryptocurrency that does lots of interesting stuff, while the price just kinda hovers. In the near term, not just the actions of investors but also the conditions in the overall marketplace—such as regulation, the adoption of Ethereum 2.0, and the growth of DeFi—will determine how Ethereum’s price performs. If Ethereum can move above and maintain key resistance levels including and especially around $2,800, it can continue to shape its upward price trajectory. To sum up, Ethereum investors are showing a high level of engagement and strategic positioning during this turbulent period of price action. They are actively adjusting their exposure and capitalizing on the price swings to try to reduce their initial cost basis and set themselves up for potential future gains. They have eyes on the key price levels that Ethereum is approaching, including the $2,800 resistance, and in this ongoing price action of the cryptocurrency market, many are looking to see what happens next with Ethereum. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: thvideo/ 123RF // Image Effects by Colorcinch
