The current strength and resilience in the Ethereum (ETH) market could potentially lead to a recovery and a breakout to new local highs.
Optimistic Outlook for Ethereum Investors
Despite the recent drop in price, Ethereum investors remain hopeful for growth. The fact that the token is still above the $3,000 mark is seen as a positive indicator that the price may rise.
This optimism is also supported by the data from Global In/Out of the Money (GIOM), which shows that a significant amount of Ethereum was purchased at lower levels. Around 9.14 million ETH, valued at over $27.4 billion, were bought between $3,537 and $3,118.
Ethereum and GIOM data. Source: IntoTheBlock
With a large portion of the circulating supply bought at lower prices, ETH holders are likely to hold onto their tokens until they turn a profit.
This sentiment is further confirmed by the Net Unrealized Profit/Loss (NUPL) indicator, which measures the potential profit or loss that investors could make if they were to sell their assets at the current market price.
Currently, the NUPL value for Ethereum is in the bullish zone, historically associated with price rallies. This indicates that despite the recent correction, Ethereum still has the potential for a new rally.
ETH Forecast: Support Level Rebound
The primary objective for Ethereum at the moment is to maintain the $3,000 level and not lose it as support. With investors maintaining a bullish outlook, there is an opportunity for ETH to initiate a rebound.
The most likely scenario is a potential 20% rally that could push the altcoin above $3,500. To achieve this, Ethereum needs to overcome the resistance at $3,376 and establish it as a new support level. This rally would also bring the previously mentioned supply volume back into profit territory, which could further attract investors.
1-day ETH/USDT chart. Source: TradingView
On the other hand, if Ethereum fails to hold the critical support level, it may experience a drop and test the $2,736 level. A breakdown below this support would invalidate the bullish scenario and potentially lead to further price decline.
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