Ethereum has been fluctuating within the critical $3,500-$4,000 range, with its price recently finding support near the lower boundary at $3,500. Following this rebound, the bulls are attempting a renewed push toward the $4,000 resistance level. Technical Analysis The upward momentum in Ethereum’s price encountered a pause at the $4,000 resistance, which has proven to be a key selling zone.
This rejection led to a decline toward the lower boundary of the range at $3,500. However, renewed buying activity at this support has triggered another strong push upward, targeting the $4,000 threshold. The $4,000 resistance is crucial, as it aligns with Ethereum’s prior swing highs and has repeatedly rejected bullish attempts.
Consequently, the short-term outlook suggests continued consolidation within the $3,500-$4,000 range. A decisive breakout above the $4,000 level could pave the way for a broader bullish rally. Onchain Analysis Ethereum’s price behavior, particularly its stability at the $3,500 support level, reflects the significant liquidity concentrated below this threshold.
Similarly, the $4,000 resistance level marks another critical zone of liquidity, primarily associated with short positions placed in anticipation of a price rejection. These two levels represent the highest concentration of liquidity near the current price. If ETH successfully breaches the $4,000 resistance, it could trigger a short-liquidation cascade as short-sellers rush to cover their positions.
This would likely result in an impulsive price surge as the unwinding of these positions fuels further upward momentum. However, a breakout in either direction has the potential to ignite a liquidation cascade, intensifying the subsequent price movement. Given the prevailing market dynamics, a bullish breakout above $4,000 appears to be the more probable scenario.
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