The price of Ethereum has been almost stagnant over the past week. Despite numerous predictions, there has been no significant volatility. On the surface, it seems like nothing is happening. However, when looking at the charts and on-chain data together, a completely different situation is revealed. A clear breakout structure is forming, and at the same time, the selling pressure from long-term holders has significantly decreased.
Such combinations are very rare. If this state persists, the next major flow of Ethereum may have already begun.
Inverse head and shoulders breakout... sharp decrease in on-chain selling
On the daily chart, Ethereum is forming a clear inverse head and shoulders reversal pattern. This structure has a flat neckline around the $3,400 range. This part is important. The flatter the neckline, the more likely it is that a stronger trend will follow when the price breaks out.
If Ethereum clearly closes above this neckline (around $3,400), it can reach approximately $4,400, rising by the height of the confirmed pattern. This target price is the value projected upward from the height of the head. From a technical perspective, this buying zone is very clear.
Would you like to receive more token insights like this? You can subscribe to Editor Harsh Notariya's daily crypto newsletter here.
The reason this pattern feels more attractive is due to the changes happening on-chain.
The holder supply position change indicator shows whether long-term holders are selling or accumulating. Since November 26, this indicator has changed dramatically. At that point, long-term holders were selling approximately 1.1 million Ethereum. However, by December 23, this number decreased to 54,427.
This indicates that selling pressure has decreased by over 95%.
The reason this point is important is that long-term holders tend to reduce selling near major inflection points. When a breakout pattern appears and selling pressure sharply decreases, it suggests that supply is decreasing rather than increasing. This creates a more solid floor for the upward movement above the neckline.
In simple terms, the chart is sending a breakout signal, and on-chain data shows that selling pressure has decreased.
Ethereum purchase price · key price range
The next question is whether Ethereum can reach and break through the neckline.
Cost basis (purchase price) data provides part of the answer. The cost basis shows the point at which a large amount of Ethereum was last purchased. This range tends to act as strong resistance when the price reaches it again, as investors may sell when they approach the breakeven point.
In the case of Ethereum, the most important cost basis cluster is around the $3,150 to $3,173 range. Approximately 2.94 million Ethereum were accumulated in this range. Therefore, this range forms the strongest supply barrier during the breakout.
If the price continues to move above this point, it opens the way for a breakout above the $3,400 neckline. This level is roughly equivalent to about a 7% increase from the current price. The $3,150 range also appears on the price chart, verifying its importance.
If it settles above $3,400, the next major resistance is $3,480, and thereafter, the area up to approximately $4,170 continues with relatively weak resistance.
If buying pressure increases after the breakout, it is possible to reach the complete target of the inverse head and shoulders pattern at $4,400.
There are still risk factors that are clearly distinguishable. If Ethereum falls below $2,800, the structure weakens. If it drops below $2,620, the bullish scenario is completely invalidated, suggesting that the selling pressure has regained control.
Currently, the bullish advantage is maintained. Textbook reversal patterns, a sharp decrease in long-term selling pressure, and clear resistance structures all support the same conclusion. However, for this bullish scenario to firmly succeed, it must clearly close above the supply barrier at $3,150.
