Ethereum Drops 11%: Accumulation During the Decline

Ethereum failed to maintain the bullish trend after breaking through the $2800 resistance. The price of the ETH token fell sharply due to bearish conditions, dropping below $2500.

However, this downtrend offered Ethereum investors an opportunity to accumulate the token at a lower value.

Ethereum Investors Take Advantage of the Drop

According to data from the Cost Basis Distribution (CBD), Ethereum investors are showing confidence in the token despite the price drop. Glassnode said ETH's CBD indicates a steady acquisition by investors to capitalise on profits. Many cost basis indicators are falling, suggesting that investors are benefiting from this down phase.

The data shows strong support at $2,632, where more than 0.7 million ETH have been accumulated, and resistance at $3,149, with an accumulation value of 1.22 million ETH. These support and resistance levels are crucial to the stability of Ethereum's price, as they indicate where large investors are buying and selling the token.

Despite the decline, the macroeconomic momentum of ETH remains solid. The net balance of exchanges is showing a significant shift, with some 178,500 tokens withdrawn from exchanges in the past two days.

This shift indicates that investors are moving their assets to cold wallets with the intention of holding them for the long term and making future gains. Outflows have totalled $444 million, signalling strong investor confidence in a future recovery in Ethereum's price once the bearish phase is over.

Currently, the token is trading at $2406, marking an 11% drop in the past 24 hours. The drop follows an attempt to break above $2793, keeping ETH in a three-month downtrend. However, the future price shows signs of a possible recovery, despite still being below $2500.

Possible Scenarios for Ethereum

If Ethereum's price manages to exceed $2600, it could trigger a rebound and push it above $2793, with the possibility of reaching $3000 again.

Conversely, if ETH fails to recover the $2654 level and continues to move in a bearish phase, it could fall further below $2350. In that case, there would be further losses, invalidating the bullish trend that many investors have been waiting for.