A Glassnode analyst has highlighted that Ethereum is retesting a dense supply cluster, which could determine the cryptocurrency’s next direction.
Ethereum Faces a Key Test on the Cost Basis Distribution
In a recent post on X, Glassnode analyst Chris Beamish discussed Ethereum’s position from the perspective of the Cost Basis Distribution (CBD). The CBD is an on-chain metric that shows the total amount of ETH last purchased at various price levels throughout the cryptocurrency’s history.
The chart shared by Beamish reveals a CBD heatmap for Ethereum. It shows that Ethereum’s low in November created a dense supply cluster around the $2,750 level. This zone has since acted as a support level multiple times.
This pattern can be explained by investor psychology. Investors tend to be sensitive when the price retests their average purchase price, as it can shift their position from profit to loss. When this retest occurs from above, holders may buy more to defend their break-even point—a behavior potentially observed since November.
From the chart, Ethereum retested the $2,750 supply zone twice in December, rebounding both times. A third retest is currently underway, and while support has held so far, it remains to be seen how long the price can stay above this level.
“Holding here suggests absorption and base building, but a breakdown would move price into thinner support where underwater supply may derisk,” the analyst explained.
Areas where a large amount of supply shares a common cost basis often act as significant support or resistance. The $2,750 cluster fits this description, though it is not impenetrable. “Next move hinges on this level,” Beamish noted.
Other Developments: Transaction Fees Hit Multi-Year Low
In other news, Glassnode pointed out that Ethereum transaction fees have recently declined, falling to their lowest level since May 2017. This could indicate reduced network activity.
ETH Price Update
At the time of writing, Ethereum is trading around $2,950, down 1.5% over the past week.
Frequently Asked Questions
FAQs Ethereums Next Move The Key Level
Beginner Questions
1 What does Ethereums next move mean in this context
It refers to the potential future price direction of Ethereumwhether it will likely go up go down or trade sideways in the near term
2 What is a key level in trading
A key level is a specific price point that many traders and analysts watch It often acts as a support or resistance Breaking through these levels can signal a significant shift in market sentiment
3 Who is Glassnode and why are they important
Glassnode is a leading blockchain data and intelligence platform Analysts use its onchain data to provide insights into market trends often giving a deeper view than just price charts
4 What specific key level is the analyst talking about
While the exact price can change daily the analyst is typically referring to a major support or resistance zone For example it might be a level like 3200 or 3500 You would need to check the latest analysis for the current figure
5 Why does one price level matter so much
These levels represent areas where a large number of trades have historically occurred If the price holds above a key support level it shows buyers are in control If it breaks below it can trigger selling as traders lose confidence potentially leading to a steeper decline
Intermediate Advanced Questions
6 What kind of onchain data is Glassnode likely analyzing
They might look at metrics like
Exchange Netflow Are more ETH being moved to exchanges or from them
Realized Price The average price at which all coins in circulation were last moved It can indicate overall investor profitability
MVRV Ratio Compares current market cap to its realized cap showing if the asset is over or undervalued historically
Supply in ProfitLoss The percentage of ETH coins currently held at a profit or loss