Will Ethereum Price Maintain $3,000 Support or Face a Correction?

Ethereum (ETH) has significantly increased by 19% over the past week, bringing its price close to the $3,000 mark.

This price surge is impressive, driven by broader market optimism. However, Ethereum faces potential challenges from profit-taking, which could hinder its ability to maintain the $3,000 level.

Ethereum Holders Shift to Selling

The Ethereum network's Realized Profit/Loss index has surged to $1.36 billion, marking the largest increase since December 2022. This strong surge in realized profit indicates significant selling pressure.

Selling in the past 24 hours is at its highest in 31 months, showing many investors are taking profits from the recent price increase.

History suggests such large sell-offs are often accompanied by price corrections. With the current scale of selling activity, investors should be cautious, as this may signal a short-term decline in Ethereum's price.

An important indicator of Ethereum's support lies in its cost basis distribution, showing that $2,500 has become a strong accumulation zone.

Over 3.45 million ETH have a cost basis near this level, providing significant support for the altcoin. When Ethereum recently bounced from $2,533, this level became an important launch pad for the current price increase.

The $2,500 support level is crucial if Ethereum faces a price decline due to profit-taking. If ETH drops, the strong accumulation around $2,500 is likely to act as a buffer, preventing deeper declines and supporting a potential recovery.

ETH Needs to Find Support

Ethereum is currently trading at $2,975, just below the important $3,000 resistance level. After waiting for months to break through this level, Ethereum has finally done so.

However, the challenge remains to maintain $3,000 as support. If ETH cannot hold this level, the price surge may face significant resistance, limiting further gains.

Profit-taking may continue to impact Ethereum's price in the short term. However, if Bitcoin's upward trend continues and the broader market conditions remain optimistic, converting $3,000 to support could potentially push Ethereum to the next resistance level at $3,530. This move would indicate that the current price momentum remains intact.

If profit-taking intensifies, Ethereum's price could drop below $3,000. The 19% increase this week might be erased, but ETH is expected to hold above $2,495, thanks to the strong support established at $2,500.

However, this will extend the waiting time to see Ethereum break $3,000 in the third quarter.