Ethereum (CRYPTO: ETH), the second largest cryptocurrency by market cap, hit an all-time high of $ 2,151 earlier this week, but struggled to find support above $ 2,000.
What happened: According to a market intelligence report from Chainalysis, the cryptocurrency value curve suggests that Ethereum’s peak price has a narrower support base than Bitcoin’s peak price (CRYPTO: BTC). The highest observed demand for Ethereum (ETH) was at $ 1,800.
Chief Economist at Chainalysis Philip Gradwell analyzed the cost of obtaining data for a digital asset in order to determine demand and therefore support at different price levels.
Gradwell noted that, as with Bitcoin, the Ethereum market has changed radically in recent months, with the acquisition cost increasing significantly by 50 million ETH out of 115 million.
Why is it important: The above chart shows the cost of acquiring Ethereum on April 5, 2021 in USD.
According to the chart, a very large amount of Ethereum is owned by organizations that purchased it for around $ 1,800.
By comparison, the number of ETH purchased over $ 1,850 is much less, with around 700,000 acquired for a total of $ 1.4 billion.
According to Chainalysis, this means that Ethereum’s record high of $ 2,151 was slightly above significant support and suggests that the peak was driven by relatively little demand.
However, Gradwell noted that “the support at $ 1,500 is particularly strong as 33.3 million ETH were purchased above this level for a total of $ 58 billion.”
The economist also noted that the cost curves from 2016 show that after the cryptocurrency rally in 2017, only a small group of ETH buyers continued to hold onto, despite subsequent losses.
“This confirms concerns that the highest ETH prices tend to have a narrow support base, at least when compared to Bitcoin,” he said.
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