Ethereum traders are closely monitoring on-chain data for insights into market dynamics, and the latest Cost Basis Distribution Heatmap from glassnode reveals compelling patterns in ETH holder behavior. According to glassnode, there's evident profit-taking among buyers who acquired ETH around the $2,520 price level, as shown by a fading red band starting from approximately July 1, 2025. Despite this selling pressure, these holders still retain nearly 2 million ETH, suggesting a strategic approach rather than a full exit. This heatmap, which visualizes the distribution of ETH acquisition costs over time, highlights how investors are realizing gains while maintaining significant positions, potentially anticipating further upside in the Ethereum market.

Analyzing ETH Profit-Taking and Support Levels

Diving deeper into the trading implications, the $2,520 level emerges as a key resistance point where profit-taking has intensified. On July 22, 2025, glassnode shared this data via Twitter, noting the gradual fade in the red band, which indicates that sellers are offloading portions of their holdings acquired at that cost basis. However, the retention of almost 2 million ETH by this cohort points to confidence in Ethereum's long-term potential. From a trading perspective, this could signal a healthy correction, where supply is being absorbed by new demand. Traders should watch for support levels below $2,520, such as the $2,400 mark, which has historically acted as a psychological floor during recent dips. If ETH price approaches this area, it might present buying opportunities, especially if on-chain metrics like realized profit/loss ratios continue to show balanced profit realization without panic selling.

In terms of market indicators, the heatmap underscores strategic profit-taking, which often precedes bullish continuations in cryptocurrency markets. For instance, similar patterns were observed in previous ETH rallies, where partial sells at key cost bases allowed for price stabilization before upward moves. Current trading volumes, while not specified in the immediate data, typically spike around such levels, providing liquidity for entries. Ethereum's on-chain activity, including metrics like active addresses and transaction volumes, could further validate this if they remain robust. Traders focusing on ETH/USD or ETH/BTC pairs might consider long positions if the price holds above $2,500, targeting resistance at $2,800 based on historical Fibonacci extensions from the July 2025 lows. This setup aligns with broader crypto market sentiment, where institutional flows into ETH ETFs have been absorbing supply, potentially driving the next leg up.

Trading Opportunities Amid Expecting Upside

One of the key takeaways from glassnode's analysis is the expectation of more upside, as holders are not fully liquidating despite profits. This implies that new demand is effectively absorbing the supply from profit-takers, which could lead to reduced selling pressure and higher prices over time. For day traders, scalping around the $2,520 level with tight stop-losses below $2,500 might yield short-term gains, while swing traders could look for breakouts above this resistance for targets near $3,000. On-chain metrics such as the Net Unrealized Profit/Loss (NUPL) indicator often correlate with these heatmaps, showing when markets shift from greed to extreme greed phases. If ETH's 24-hour trading volume increases alongside this absorption, it would confirm bullish momentum. Additionally, correlations with Bitcoin's performance should be monitored, as ETH often follows BTC's lead in risk-on environments.

Broader market implications extend to how this profit-taking affects overall crypto sentiment. With Ethereum's upgrade cycles and growing DeFi adoption, the retention of 2 million ETH by profit-takers suggests underlying strength. Traders should integrate this with technical analysis, such as RSI levels hovering around 55-60, indicating room for upside without overbought conditions. Risk management is crucial; setting stops at recent lows around $2,300 from early July 2025 could protect against downside volatility. Ultimately, this data from glassnode on July 22, 2025, provides a roadmap for Ethereum trading strategies, emphasizing patience for confirmed breakouts while capitalizing on dip-buying opportunities driven by new demand. As the crypto market evolves, such on-chain insights remain invaluable for identifying trading edges in volatile conditions.