Ethereum (ETH) saw a significant increase of 19% last week, raising its price close to $3,000.
The rally was driven by market optimism. However, Ethereum faces a potential challenge with profit-taking, which may hinder its ability to maintain the $3,000 level.
The Realized Profit/Loss indicator of the Ethereum Network rose to $1.36 billion, marking the highest increase since December 2022. This sharp increase in realized profits indicates significant selling pressure.
The sell-off observed in the last 24 hours is the highest in 31 months, suggesting that many investors are taking advantage of recent price gains.
Historically, large sell-offs like this are followed by price corrections. Given the magnitude of current selling activity, investors should be cautious as this may signal a short-term retracement in the price of Ethereum.
Realized Profit/Loss of the Ethereum Network. Source: Santiment
A key indicator of potential support for Ethereum lies in the distribution of its cost basis, showing that $2,500 has become a strong accumulation zone.
More than 3.45 million ETH had a cost basis close to this level, providing significant support for the altcoin. As Ethereum recently recovered from $2,533, this level has become an important base for its current rally.
This support level of $2,500 is crucial if Ethereum faces a price drop due to profit-taking. Should the ETH price retreat, strong accumulation around $2,500 will likely act as a buffer, preventing a deeper retracement and supporting a possible recovery.
Ethereum Cost Basis Distribution. Source: Glassnode
ETH price needs to find support
Ethereum is currently trading at $2,975, just below the crucial resistance of $3,000. After waiting five months to surpass this level, the asset has finally crossed it.
However, the challenge remains to secure $3,000 as support. If ETH fails to maintain this level, the rally may face significant resistance, limiting further gains.
Profit-taking may continue to weigh on the price of Ethereum in the short term. However, if Bitcoin's bullish trend continues and market conditions remain optimistic, turning $3,000 into support will likely push the token toward the next resistance at $3,530. This movement would indicate that the current upward momentum is still intact.
ETH Price Analysis. Source: TradingView
If profit-taking increases, the price of Ethereum could fall again below $3,000. The 19% gain seen this week may be undone, but it is expected that ETH will remain above $2,495, thanks to strong support established at the $2,500 level.
However, this would prolong the wait to see Ethereum above $3,000 later in the third quarter.
The article 'Will Ethereum (ETH) hold $3,000 or face a correction?' was first seen on BeInCrypto Brazil.
