The price of Ethereum (ETH) has broken the $4,000 support for the first time this month. The altcoin is trading near $3,727 this October 17th, reflecting a general weakness in the cryptocurrency market. Despite the drop, Ethereum on-chain data suggests that selling pressure is easing. Analysts observing the Glassnode platform point to capitulation indicators that historically precede a recovery.
The key indicator is the Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL) ratio. This indicator has entered the capitulation zone. This metric measures the profitability of recently moved coins, specifically those held by new investors. Its current position indicates that most short-term holders are selling their assets at a loss. While this reflects pain in the market, it usually precedes a significant rally. This phase is crucial. It represents the point of maximum pessimism among speculators. Demand begins to build as speculative selling pressure finally exhausts itself. The current pattern mirrors previous cycles where these loss conditions triggered reversals.
The recent drop has tested investor confidence. However, Ethereum on-chain data shows resilience in other cohorts. HODL Waves data, which tracks the age of coins, indicates that most investors are holding their positions. No massive withdrawal by long-term holders is observed. In fact, many short-term holders have matured into the next holding bracket. The 3-to-6-month group now controls nearly 12% (11.94%) of the total ETH supply. This accumulation by more convicted investors reinforces the market floor. It serves as fundamental support and favors price stability.
Can ETH reclaim the $4,000 level this week?
From a technical perspective, the ETH price must defend the current support. Analysts point to the $3,742 level as crucial. This level, identified on analysis platforms like TradingView, is the first line of defense. If Ethereum successfully bounces from this zone, the first target is to reclaim the $4,000 psychological barrier. A successful break of that psychological barrier could propel the price toward the next major resistance, located at $4,221. The network’s digital economy, which continues to grow, remains an underlying factor of interest for long-term investors.
Nonetheless, the bullish scenario requires buying momentum to be sustained. The market needs to see confirmation. If market sentiment turns bearish and the $3,742 support fails, ETH could face a deeper correction. Analysts warn that a drop toward the $3,489 zone would invalidate the short-term recovery outlook. Investors are closely watching whether the current capitulation is sufficient to absorb the supply. The market awaits a confirmation signal before restarting the next upward move.
