This week, the price of Ethereum surpassed the $2000 mark for the first time since April 2023, approaching the average cost of ETH staked in the network.
The activation of the Shapella update allowed investors to withdraw their locked ETH from the Beacon Chain network. However, instead of selling their coins, holders chose to restake them and wait for higher prices. Let’s explore the actions they will take as the Ethereum price approaches their breakeven point.
Ethereum stakers still incurring losses
According to Glassnode’s report for 2022, a significant portion of ETH locked in smart contracts was acquired at an average price of $2390. This information is corroborated by Coinmarketcap, which reported that 68% of staked coins are still at a loss.
This week, the price of Ethereum surpassed the $2000 mark for the first time since April 2023, approaching the average cost of ETH staked in the network.
The activation of the Shapella update allowed investors to withdraw their locked ETH from the Beacon Chain network. However, instead of selling their coins, holders chose to restake them and wait for higher prices. Let’s explore the actions they will take as the Ethereum price approaches their breakeven point.
Ethereum stakers still incurring losses
According to Glassnode’s report for 2022, a significant portion of ETH locked in smart contracts was acquired at an average price of $2390. This information is corroborated by Coinmarketcap, which reported that 68% of staked coins are still at a loss.
However, considering that Ethereum has appreciated by 70% over the year, the price of the asset is approaching the breakeven point. This suggests that it may encounter significant challenges in surpassing the $2500 resistance level.
The activity of Ethereum users has significantly decreased
The activity of ETH users has noticeably decreased recently. While the number of new addresses created on the Ethereum network has increased significantly over the past few months, the number of active blockchain users is experiencing a decline.
“Active” refers to unique addresses that are involved in transactions as senders or recipients. The graph above indicates that the average monthly count of these addresses was lower than the annual average, suggesting that significant price growth for ETH is not expected in the near future.
Bulls are unlikely to have enough strength for a breakthrough above $2500
As noted earlier, a significant portion of ETH stakers acquired their coins at an average price of $2390. If they decide to sell a portion of their holdings once they reach breakeven, it is unlikely that the asset will be able to surpass the $2500 mark, even in the face of a strong bullish impulse.
Data from the analytical platform IntoTheBlock supports this forecast. The chart shows that currently, 7.3 million addresses hold 33.55 million Ethereum, purchased at an average price of $2365. This cohort of investors can significantly slow down growth or even trigger a pullback to the $1970 level.
Bulls will gain control of the situation only if ETH breaks above $3000. However, at this level, they will encounter a wall of 9.2 million addresses that acquired 3.88 million coins at an average price of $3075 and will aim to exit at breakeven.
