After recent consolidation, Ethereum (ETH) is brewing to break through the strong resistance area of $3500, and the market generally views its potential for a more than 20% increase this month positively. However, whether ETH can break through $4000 within this month still depends on the following key factors.
Technical Analysis: Breakthrough Pressure and Potential
Recent Consolidation Nearing Its End
The ETH price is currently hovering around $3400, showing signs of gradually breaking away from the consolidation area. The probability of breaking through the $3500 resistance level in the short term is high, which may open the door for further rises to $4000.Technical Indicator Signals
The RSI indicator shows sustained incremental signals, indicating strong bullish sentiment in the market.
The MACD indicator, although showing slightly weakened buying pressure, has not exhibited a significant bearish trend. In the short term, it may still remain moderately bullish.
Ascending Triangle Pattern: ETH has formed an ascending triangle in the long-term chart, confirming its long-term upward potential, but in the short term, it still needs to overcome the strong resistance range of $3500 to $4000.
Trading Volume and Capital Flow
The recent outflow of $77 million from the ETF may suppress ETH price increases in the short term, but if large-scale capital inflows can be restored, the market will welcome a new round of upward momentum.
Market Drivers: Possibility of an Outbreak
Seasonal Effects at the Start of 2024
Ethereum prices often show double-digit increases at the start of annual trading, related to new capital allocation and an increase in risk appetite among market participants. This year, market sentiment is clearly more bullish, especially after the market recovery in 2023.Macroeconomics and Bitcoin Competition
As Bitcoin attracts most institutional attention, ETH, as the second-largest token by market cap, is drawing more attention from altcoin investors. The rise in ETH prices may coincide with a decline in Bitcoin's dominance, providing liquidity to the entire altcoin market.Bull vs Bear Sentiment Showdown
If the ETH price breaks through $3500 and stabilizes, it may attract more chasing funds, rapidly pushing the price to test $4000. However, whether the strong performance of the market bulls can be sustained still depends on a surge in trading volume.
Conditions and Challenges for Breaking $4000
Key Conditions
In the short term, trading volume needs to increase significantly, coupled with capital inflows, to break the long-term stagnation in trading volume.
Bulls need to steadily advance in the range of $3500 to $3700 to attract more investor confidence.
Potential Challenges
If market capital inflows are insufficient, ETH may encounter selling pressure around $3500, leading to a blockage in upward momentum.
Macroeconomic factors or regulatory changes could bring unexpected risks to the market.
Optimistic Outlook: $4000 is Just the First Step
If ETH can break through $4000 this month and maintain its strength, market sentiment may further turn bullish, pushing the price to test the psychological barrier of $5000. In the longer term, Ethereum's technological improvements (such as Layer 2 scaling solutions) and increased institutional interest will continue to support its long-term growth potential.
Future Bullish Sentiment for ETH and Market Confidence
As ETH gradually moves away from the consolidation range, the market is full of expectations for its short-term upward potential. However, $4000 is not an easy threshold to break through, requiring dual support from trading volume and bullish sentiment.
Do you think Ethereum can successfully break through $4000 this month? Or will it welcome a historic breakthrough of $5000 even earlier? Feel free to leave your predictions!
