ether (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 report by Chainalysis, the cryptocurrency’s cost curve suggests that the top price of Ethereum has a tighter support base than the top price of Bitcoin (CRYPTO: BTC). The strongest observed demand for Ethereum (ETH) was $ 1,800.
The chief economist of chain analysis, Philip Gradwell, analyzed the cost of data collection for the digital asset in order to determine the demand and thus the support at different price levels.
Gradwell noted that the Ethereum market, similar to Bitcoin, has changed radically in recent months and the acquisition costs for 50 million ETH with a total supply of 115 million have risen significantly.
Why it matters: The graph above shows the US dollar cost of Ethereum on April 5, 2021.
According to the graph, a very large chunk of Ethereum is held by companies that purchased it at around $ 1,800.
In comparison, the ETH amount acquired over $ 1,850 is much less. Around $ 700,000 will be acquired with a total of $ 1.4 billion.
According to Chainalysis, this means that Ethereum’s all-time high of $ 2,151 was well above a high level of support, suggesting that the peak was driven by relatively low demand.
Gradwell noted, however, that “the $ 1,500 support is particularly strong, with 33.3 million ETH acquired above that level at a total cost of $ 58 billion.”
The economist also pointed out that the cost curves since 2016 show that after the Crypto Bull Run 2017, only a small cohort of ETH buyers lasted despite later losses.
“This supports concerns that the highest ETH prices tend to have a tight support base, at least when compared to Bitcoin,” he said.
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