Ethereum (ETH) appears to be closing August on a high note, with an increase of over 23% and ending a three-year trend of negative Augusts. In contrast to Bitcoin, which has had a tough month, ETH has demonstrated resilience.
However, historically, September has been one of Ethereum’s weaker months, with modest gains of 3.20% in 2024 and 1.49% in 2023 following a series of losses in previous Septembers. With the charts showing mixed signals, ETH may be in for a turbulent month.
Long-Term Holders May Take Profits
A crucial metric to monitor is Ethereum’s Net Unrealized Profit/Loss (NUPL), which gauges the overall profitability of holders.
A high NUPL indicates that most wallets are in profit, often signaling that some may take profits. Currently, Ethereum’s long-term holder NUPL is at 0.62, nearing a three-month peak.
Historically, similar levels have precipitated corrections. On August 17, when NUPL reached 0.63, ETH dropped from $4,475 to $4,077 (-8.9%). Later that month, it fell from $4,829 to $4,380 (-9.3%) at 0.66. This suggests that September might bring volatility or range-bound action.
Historically, September hasn’t been ETH’s best month. This history, coupled with a high NUPL, supports the argument for potential volatility.
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Nevertheless, long-term fundamentals remain supportive of a price increase. In an exclusive interview with BeInCrypto, Kevin Rusher, CEO of RAAC, explained:
“In September, I expect the factors influencing Ethereum’s price to remain largely unchanged, mainly the increasing trend of companies buying ETH for their treasuries. Just this week, Standard Chartered cited this as the key reason for raising its ETH price target to $7,500,” he mentioned.
This accumulation trend, along with Ethereum’s function in DeFi and real-world asset (RWA) tokenization, might help mitigate downside risks even if short-term volatility persists.
Cost Basis Heatmap Indicates Key Resistance
Another essential metric is the Cost Basis Heatmap, illustrating where ETH was last accumulated. These areas often serve as natural support or resistance.
The strongest support level is between $4,323 and $4,375, where over 962,000 ETH were accumulated. Below that, additional support exists at $4,271–$4,323 (418,872 ETH) and $4,219–$4,271 (329,451 ETH), offering buffers in case of a price decline.
The major challenge lies above. Between $4,482 and $4,592, nearly 1.9 million ETH were accumulated, creating a significant resistance zone.
If the ETH price surpasses this, momentum could shift toward $4,956. More details on this later when discussing Ethereum’s price action.
Technical Charts Indicate Ethereum Price Fluctuations
The 2-day Ethereum price chart reveals that it has fallen below an ascending trendline. This does not confirm a bearish reversal but indicates a fading bullish momentum.
The Relative Strength Index (RSI), which assesses the speed and strength of price movements, has created a bearish divergence—showing price making higher highs while the RSI trends lower.
This typically indicates weakening strength and a probability of range-bound trading, particularly if it occurs on a longer timeframe.
If ETH reclaims $4,579 (almost breaking through the cost basis resistance), upside momentum could revive, with the key target at $4,956.
On the downside, monitor $4,345 and $4,156 as significant support levels. A breach below $4,156 could lead to further downside risks, while maintaining above $4,579 keeps $4,956 (near the $5,000 psychological barrier) attainable.
However, for Ethereum, that level could signify the beginning of something larger, as summarized by Rusher.
“Yes, $5,000 is still a significant milestone. Psychologically, investors prefer round numbers, and it’s a new all-time high. Once ETH surpasses the $5,000 level, it will likely become a well-defended support point,” he added.
However, if Ethereum closes below $4,156 with a full 2-day candle, the bullish outlook may take longer to materialize.
With long-term holder NUPL nearing three-month peaks, the discussion of volatility becomes even more relevant.
Disclaimer
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