Ether Drops Below $2,000, Investors Eye $1,900 Support

Ethereum’s native token, Ether (ETH), has been trading below the $2,000 mark, a level that many traders consider psychologically significant. On March 10, the price of Ether slipped below this range and has since been trading at its lowest value since October 2023. This downward trend has raised concerns among investors about the potential for further losses and the possibility of a market correction.

One of the key questions on investors' minds is whether Ether can recover some of its recent losses or if traders will capitulate if the price falls below $1,900. According to data from a data analytics platform, Ethereum holders have accumulated 3.56 million ETH between $1,900 and $1,843, with an average price of $1,871. This accumulation is valued at approximately $6.65 billion, indicating a strong support level between $1,900 and $1,843. This range could potentially act as a bullish reversal zone, providing a floor for the price of Ether.

However, if Ether drops below $1,843, there is a risk of rising capitulation fears. Capitulation occurs when investors panic and sell their positions at a loss during a sharp market correction. If Ether consolidates below $1,843 for an extended period, the likelihood of a deeper correction increases significantly. Below this level, the size and volume of ETH accumulation are significantly lower, underscoring the importance of the $1,900 to $1,843 support range.

Additionally, the percentage of Ethereum addresses in profit has dropped to its lowest level since the start of the decade, at just under 46%. Historically, a low percentage of profitable addresses has indicated a price bottom for Ethereum. Given the high accumulation of ETH and the fewer profitable addresses, these factors may act as bullish signals, suggesting that the likelihood of Ethereum consolidating below $1,843 in the long term is decreasing.

Hitesh Malviya, the founder of DYOR crypto, noted that it is not a “great time to be bearish on ETH.” He highlighted the recent rise of real-world assets (RWAs) in the industry, with a significant increase in growth over the past 30 days and an 850% yearly increase. Ethereum and ZKsync have captured more than 80% of the total market share in this sector, indicating strong demand and potential for future growth.

The current market sentiment for Ether, as indicated by the long/short ratio, suggests a neutral market. This ratio evaluates the proportion of futures traders betting for price increases (long) versus decreases (shorts). According to a crypto data analysis website, the largest investors are more inclined toward taking long positions, while smaller investors are in the process of deleveraging. Deleveraging means unwinding risky, borrowed positions, which lowers market volatility and interest in leveraged trading.

With the current long/short ratio at 1.3, the market is experiencing low volatility and low interest in leverage, which may leave many traders exhausted and impatient. This cautious sentiment suggests that while there is potential for a recovery, the market is currently in a state of uncertainty and consolidation.