Ethereum (ETH) Price Analysis: Key Support Level at $2300, Potential Market Sell-off if Breached

Ethereum [ETH] has followed a different trajectory to Bitcoin in the past week, registering moderate gains on its monthly price charts.

Ethereum [ETH] price action has been moderate compared to Bitcoin’s trajectory in the past week. While BTC registered losses, ETH noted gains on the monthly price charts.

At the time of writing, Ethereum was trading at $2,404, noting a 1.06% increase on the weekly charts. Interestingly, ETH also noted gains on the daily charts.

However, ETH is still trading at a distance from its recent high of $2,700 and 50.7% away from its all-time high of $4,878. But crypto analyst Ali Martinez highlighted a crucial support level for the second-largest cryptocurrency.

According to Martinez, the key support level for Ethereum is at $2,300. His analysis pointed out that 2.4 million addresses purchased 52.6 million ETH tokens at $2,300. He added that ETH needs to hold above this level to avoid a mass sell-off.

If Ethereum fails to maintain this demand zone, it could trigger a mass sell-off as investors try to minimize losses, leading to increased selling pressure and driving prices down.

Crucially, Ethereum’s Exchange Supply ratio noted a slight increase from 0.143 on 21 May to 0.1443 on 25 May. This suggests that holders may be preparing to sell or take profits. It is typically a bearish signal as investors move their ETH from private wallets to exchanges.

Moreover, Ethereum’s Exchange Reserve has been increasing throughout the week and was valued at $18.7 million at press time. This observation supports the notion that investors are transferring their ETH to exchanges, potentially leading to selling pressure and pushing prices down.

Interestingly, Ethereum’s MVRV long/short difference has remained negative over the past month. This indicates that long-term holders are seeing losses while short-term holders are profitable, potentially leading to long-term holder capitulation and greater selling pressure.

According to an analysis, Ethereum has been trading within a multi-month descending channel. Accompanied by negative market sentiment, Ethereum could decline before a breakout from this trend. If it sees a pullback, Ethereum will find the net support at $2,325.

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