Is Ethereum in Danger? If $2,200 is Broken, $1,160 May Come

Ethereum currently has a strong support level at $2,200, but an analyst has pointed out that if this level is broken down, the next area to watch could be $1,160. On-Chain data shows strong Ethereum demand zone near $2,200 In a new post on X, analyst Ali Martinez discussed the support levels for Ethereum based on on-chain data. In on-chain analysis, levels are considered key support/resistance zones if they hold the cost basis or buyback level of a significant portion of the ETH supply. The reason behind this lies in the fact that investors are more likely to exhibit some type of reaction when their breakeven test occurs. This buying/selling is not related to the broader market if only a few holders are being tested at the same time, but the story may be different when the retest is based on the cost basis of a large quantity of them. Below is a chart shared by the analyst, showing how different price levels around the current spot price of Ethereum are changing in terms of the amount of supply being purchased at those price levels.

In the chart, the size of the dots corresponds to the amount of Ethereum supply within the related price range. It appears that among the listed ranges, the levels from $2,218 to $2,396 currently have the largest dots, meaning they contain the most supply. Specifically, this range has a cost basis of 6.28 million addresses, who have purchased a total of 67.2 million Ether at its level. With this reality, it is possible that if this range is re-tested, investors may react strongly. But what will the reaction be, buy or sell? Yes, these investors are currently in profit and typically, such holders are more likely to double their assets when the price drops to their buyback level, as they may believe that a similar price will be profitable again in the future. Thus, the range $2.218 to $2.396 may serve as a strong support level for Ethereum. However, in the event that ETH drops below the lower level of the range around $2.200, it may have to rely on support elsewhere. From the chart, it is clear that all the ranges below are much smaller in terms of supply. The next main support area is at the lowest level of $1,160, where 35.9 million addresses have purchased 21.58 million tokens. Of course, Ethereum will not slide straight down to this area if it loses $2,200, but based on the data, it suggests that this currency may find it harder to regain its position below this level.