Ethereum: Signs point to 2022-like consolidation ahead

Whale capitulation catalyzed Ethereums [ETH] multi-year low near $1,400, as sharp drawdowns in long-term holder (LTH) balances and realized losses across large wallets became evident.

Capitulation pressure from cost basis undercut

Ethereum is currently trading 12% below its realized price of $2,002, signaling that the average holder holds a net unrealized loss position.

Source: Glassnode

Historically, this condition has reflected a market in correction or consolidation, where long-term confidence tests holders.

As illustrated in the chart, during the 2018 cycle, capitulation from average holders spiked, and insufficient bid-side absorption of the available ETH supply led to a significant drawdown until the market established a price floor.

Any rally toward $2,000 may encounter profit-taking from underwater holders, which would reinforce that level as a key overhead resistance zone.

Bullish pattern identified in Ethereums on-chain activity

Source: CryptoQuant

Consequently, rather than repeating a 2018-style capitulation, Ethereum could be entering a 2022-2023 consolidation phase.

During this phase, ETHs price action remained range-bound below $2,200 before eventually breaking through resistance levels in Q1 2024.

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