Ethereum price could suffer setback to $2,000 according to bearish on-chain metrics

• Ethereum is currently in a key demand zone, a drop below the $2,300 level could result in further decline in ETH. 
• Ethereum whales are likely realizing profits, profit-taking could push ETH lower, according to on-chain metrics. 
• ETH volume has been on a decline since January 20, alongside Ethereum price drop, supporting a bearish thesis for the altcoin.

Ethereum is trading at $2,372 on Monday. This puts the altcoin in a key demand zone. In the event that Ethereum price drops below the demand zone, the altcoin is likely to suffer a setback to $2,000. 

On-chain metrics for the altcoin are flashing neutral to bearish signals, as seen on Santiment.

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Ethereum sits in demand zone, ETH price move could determine direction of trend

According to data from crypto intelligence tracker IntoTheBlock, Ethereum price is in the demand zone between $2,368 to $2,373. A drop below this area could see Ethereum price drop to the zone between $2,010 and $2,082, since there is no significant barrier in the path, as seen in the chart below. 

On the other hand, if ETH price rallies, it faces resistance at the $2,440 level. The zone between $2,373 and $2,440 is where 903,110 ETH addresses scooped up 4.73 million Ether. 

In/Out of the Money around price. Source: IntoTheBlock

When the Network Realized Profit/Loss (NRPL) metric, which is used to track the profits realized by Ethereum holders, is combined with the whale transactions valued at $100,000 and higher, it could be assumed that large wallet investors are likely engaged in profit-taking.

As seen in the Santiment chart, the spikes in whale transactions coincide with the profit-taking spikes in the NRPL metric. Profit-taking activities by large wallet investors typically increase selling pressure on the asset and drive prices lower. 

Ethereum NRPL and whale transactions. Source: Santiment

Volume is another key metric used to track the on-chain activity of an asset. ETH volume has declined between January 10 and 22, according to Santiment data. Volume has dropped alongside a decline in ETH price. Dwindling volume and activity supports the thesis of a correction in the asset in the short-term. 

ETH Volume and price. Source: Santiment 

Ethereum price lost around 4% in the past week. ETH price hit its 2024 peak of $2,715 on January 12 and corrected to $2,372, at the time of writing. 

ETH/USDT 1-day chart

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