Ethereum's price has traded almost flat over the last week, moving barely despite countless forecasts. On the surface, it seems like nothing is happening. But both the chart and on-chain data tell a completely different story. A clear breakout structure is forming, and at the same time, selling pressure from long-term holders has collapsed.
The combination is rare. If it holds, Ethereum's next major movements may already be in play.
Inverted head-and-shoulders breakout coincides with a collapse in on-chain selling
On the daily chart, Ethereum forms a clear inverted head-and-shoulders reversal pattern. The structure has a relatively flat neckline near the $ 3400 zone, which is important. Flat necklines tend to attract stronger rises when the price first breaks through.
If Ethereum closes clearly above this neckline (around $ 3400), the target from the confirmed pattern points towards a target near $ 4400. This target comes directly from the height of the 'head' projected upward. From a technical perspective, the setup looks clean.
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What makes this pattern more compelling is what is happening on the blockchain.
Hodler Net Position Change measures whether long-term holders are selling or accumulating. Since November 26, this measurement has changed dramatically. At that time, long-term holders sold around 1,100,000 ETH. By December 23, this number had fallen to just 54,427 ETH.
There is a reduction of over 95% in selling pressure.
This is important because long-term holders usually reduce the selling volume near key turning points. When a breakout pattern occurs simultaneously as selling pressure collapses, it suggests that supply is being depleted rather than increasing. This provides a stronger foundation for any rise above the neckline.
Simply put, the chart signals a breakout, and the on-chain data shows fewer sellers standing in the way.
Cost basis and key Ethereum price areas
The next question is whether Ethereum can realistically reach and break through the neckline.
Cost basis data helps answer that. Cost basis shows where large amounts of ETH were last purchased. These zones often act as resistance as the price approaches them, as holders may consider selling near their breakeven point.
For Ethereum, the most important 'cost basis' cluster is between approximately $ 3150 and $ 3173. Around 2,940,000 ETH were accumulated in this area. This makes it the strongest supply wall on the way up.
A sustained movement above this zone will open the way towards the $ 3400 neckline. From today’s levels, this implies about a 7% increase. Note that the $ 3150 level also appears on the price chart, thus confirming its significance.
After $ 3400, the next key level will be near $ 3480, followed by a relatively weak resistance area up to around $ 4170.
If the momentum builds up after the breakout, the entire target for the inverted head-and-shoulders pattern near $ 4400 will come into view.
Risk still exists, and it is clearly defined. If Ethereum falls below $ 2800, the structure weakens. A fall below $ 2620 will completely invalidate the bullish setup and suggest that sellers have regained control.
For now, the balance favors the upside. A pattern example of reversal, a sharp decline in long-term selling, and a clearly defined resistance map point in the same direction. However, it is crucial for the bullish scenario that Ethereum closes clearly above $ 3150, i.e., the zone with the supply wall.
