Important points:
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Ethereum holders are back in the black, increasing the possibility of a rally to $4,000.
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Selling pressure risk for Ether exists around $3,800, a resistance level that could slow the bulls.
Ether (ETH) rebounded to $3,600 over the weekend, pushing its value above its current price and suggesting that the average ETH holder is no longer in the red. But is this enough fuel for the bulls to push ETH price above $4,000?
Ethereum trades above active cost base
Ether price rose 20% to $3,650 on Sunday from its four-month low of $3,957 on Nov. 4, according to data from Cointelegraph Markets Pro and TradingView.
President Trump’s promise to pay $2,000 in tariffs and optimism about the possibility of lifting the U.S. government shutdown helped fuel the economic recovery. This rally has pushed ETH above the current price of $3,545, according to Glassnode data.
Related: Ethereum network gas fees drop to just 0.067 gwei due to economic slowdown
The average ETH holder’s return to profit after unrealized losses provides meaningful financial relief for many holders and points to a bullish outlook.
Historically, when this level is breached, market sentiment shifts from “fear”, reducing selling pressure from underground holders and encouraging holdings.
The chart below shows that the price briefly fell below the realized price in January 2024 and then rose 89% from $2,165 to $4,100 when it regained the realized price.
Therefore, sustaining levels above $3,500 is crucial for the bulls to ensure a retest at $4,000.
Other important areas of support levels for the ETH/USD pair are around $2,870, $2,530, and $1,800 based on Ether’s extreme divergence price range.
ETH bears will defend the $3,800 level
According to Ether cost basis distribution data, investors hold approximately 4.2 million ETH at an average cost basis between $3,600 and $3,815, forming a potential resistance zone.
This concentration suggests that many investors may sell at breakeven, and Ether’s upward momentum may stall.
Traders say that resistance between $3,700 and $3,900 needs to turn into support for ETH to aim for highs above $4,000.
“ETH has not been able to regain the $3,700 level and is currently declining,” crypto analyst Ted Pillows said in an X-Post on Tuesday, adding:
“If ETH is able to regain the $3,700 level, it will take advantage of the $4,000 to $4,100 liquidity zone.”
Michael van de Poppe said the ETH/USD pair “needs to break out of the $3,800-$3,900 area” to trigger a move toward all-time highs.
Meanwhile, Jere said bulls need to “go even further” and push ETH price to $4,000.
“The sooner we get back above $4,000, the better.”
As reported by Cointelegraph, Tom Lee’s Bitmine accelerated its ETH accumulation last week, adding 110,288 ether to its $12.5 billion coffers with a target of 5% of total supply.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making decisions.