- Ethereum’s price is facing resistance near $4,000 but showing signs of consolidation
- The market remains bullish overall, with short-term fluctuations expected within the $3,500-$4,000 range before a potential breakout or deeper pullback
- On-chain analysis suggests a correction may be needed to sustain the rally’s momentum
Ethereum, the second-largest cryptocurrency by market capitalization, is currently in a critical zone near the $4K mark. Despite facing resistance, it also appears to be consolidating.
Understanding Ethereum’s Current Market Position:
Ethereum’s price trajectory has been impressive, edging towards the psychologically significant $4K resistance region. This price level aligns with Ethereum’s yearly high and is a robust selling pressure area. However, recent rejections at this line have resulted in a slight decline, indicating that overcoming this resistance is proving challenging for buyers.
Post-Correction Analysis:
Following the price correction, Ethereum entered a low volatility phase, suggesting a short-term consolidation period. This phase could potentially last within the $3.5K-$4K range as buyers and sellers reach a deadlock. The Relative Strength Index (RSI) indicators show bearish divergence, supporting the hypothesis of an overbought market and reinforcing the likelihood of this corrective stage.
Short-Term Expectations:
Despite facing resistance, Ethereum buyers are likely to make another push past $4K. However, a period of sideways movement is expected before this, allowing the market to digest recent gains.
Detailed 4-Hour Chart Analysis:
On a 4-hour timeframe, Ethereum maintains a bullish market structure, consistently forming higher highs and higher lows. The failure to break past the $4K resistance zone has led to a period of consolidation, with the asset hovering just below this crucial level. The lower boundary of the ascending channel, currently around $3.7K, provides short-term support. A bullish surge towards the $4K threshold is likely if the price continues to hold this level.
On-Chain Analysis:
Ethereum’s Funding Rates metric, reflecting futures market sentiment, has reached its highest level in months, coinciding with a significant price rally. This surge underlines strong bullish sentiment with traders anticipating new all-time highs. However, a correction may be necessary to sustain this momentum. The spike in funding rates signals the need for a short-term correction, paving the way for healthier and more sustainable price growth.
Conclusion:
While Ethereum’s rally is supported by bullish sentiment, the market may require a short-term correction to sustain this momentum. The future for Ethereum after its rejection at $4K is uncertain, but the signs of consolidation and the likelihood of another push by buyers suggest potential for growth. However, investors are advised to conduct their own research before making any investment decisions.
