- ETH supply in loss reaches 44 million, eliciting the push to buy the dip.
- Ether might drop to the 200 SMA at $1,190 if support at $1,700 deteriorates.
- Recovery is unlikely to be smooth if the IOMAP barrier between $1,930 and $1,982) is considered.
The second most valuable cryptocurrency, Ethereum, has not printed a bullish candle since the beginning of April. All recovery attempts failed to hold with losses increasing in intensity. However, the token is sitting on crucial support at $1,700, which, if protected against the strong downward forces in the market, could become Ether’s springboard to reclaim lost ground.
Ethereum Supply In Loss Rises To A 12-Month High
Data from Glassnode, a leading on-chain and behavioral platform, exuded that the supply of Ethereum recently soared to approximately 44 million. In other words, the figure represents tokens whose price at the time they last moved was higher than the prevailing market price.
Based on the insight from the chart, it is recommended to buy when this metric is at its peak. Therefore, as Ethereum’s price slides to explore more downhill levels, investors are encouraged to continue filling their bags amid speculation of an imminent rally.
Why Ethereum Must Defend The $1,700-Support At All Costs
The flagship smart contracts token was forced to revisit the crucial support at $1,700. This level played an instrumental role in 2021’s rally to the record highs. The weekly chart (below) shed light on the buyer congestion that was relevant in March and July.
The same region coincides with the descending channel’s lower boundary. The importance of this support area cannot be overemphasized, especially with the technical outlook remaining drab.
If broken, the rollercoaster ride to the abyss may carry on to the 200 Simple Moving Average (SMA) currently holding the ground at $1,190. The Moving Average Convergence Divergence (MACD) spotted a vivid sell signal when the 12 Exponential Moving Average (EMA) crossed below the 26 EMA in early April.
ETH/USD Weekly Chart
Adding credence to the dreary technical outlook is the In/Out Of Money Around Price (IOMAP). The model below reveals the lack of robust support, which might see the loosely hanging Ether dive to $1,190.
The situation gets worse on the upside, especially if the barrier between $1,930 and $1,982 is considered. Here, the 999,400 addresses that previously purchased 8.01 million ETH may seek to offload their bags, thus adding to the selling pressure.
ETH IOMAP Model
On the flip side, a recovery above $2,000 may soon follow due to the oversold conditions as illustrated by the Stochastic RSI. Traders should not forget the robust $1,700-support, which could be Ethereum’s gate-pass to a much-awaited rally.
