According to the explanation from the chain analysis firm Glassnode in a recent post on X, the upward trend of ETH has stalled after the price of this asset reached the levels of historically relevant pricing models.
The model referred to here is the "Active Realized Price", which essentially tells us about the cost basis of investors or the average address on the Ethereum network. This indicator differs from the usual Realized Price in that it excludes inactive or lost supply from the data.
Below is the chart shared by Glassnode showing the trend of the model as well as the standard deviation (SD) +1 of the model over the past few years:
As shown in the chart above, Ethereum has recently traded above the Active Realized Price, indicating that holders of this asset are on average holding some unrealized net profits.
The recent bull run has pushed this cryptocurrency far beyond this level and, in fact, has tested the +1 SD threshold. From the chart, it can be seen that this threshold is currently at around $4,700.
This is the price level that the asset peaked at last week before starting to decline by about 10%. Therefore, it seems that this threshold may serve as a resistance level.
According to the analytics firm, this is not unusual, as this line has served as a barrier multiple times in previous cycles. The reasoning for this trend may lie in the fact that this level is around the investor profit margin large enough to trigger a mass sell-off motivated by profit-taking.
In the current cycle so far, Ethereum has been able to break this line once, in March 2024. However, this breakout only lasted for a short time, indicating that selling pressure once again poses a major obstacle to the upward momentum.
In other news, last week was the strongest week for Ethereum exchange-traded funds (ETFs) since their launch in the United States, as Glassnode pointed out in another post on X.
As can be seen in the chart above, U.S. spot Ethereum ETFs witnessed a surge in net cash flow last week, with 649,000 tokens of this asset being added to wallets linked to these funds. The coin has risen above $4,700 as this cash flow came in.
