Ethereum ($ETH ) has faced significant resistance at the $4,000 mark since March 2024, encountering rejections three times. Currently trading at $3,475, ETH has experienced a 24% drop from a high of $4,087 to a recent low of $3,097. While there was a brief bounce, the overall market sentiment remains weak.
Challenges at $4,000 Resistance
The $4,000 price point continues to act as a strong resistance level for Ethereum. Despite a minor rebound from the recent dip to $3,097, trading volume has declined by nearly 15%, indicating a lack of market interest. The relative strength index (RSI) remains neutral at 52.64, signaling a stagnant market, and the 20-day moving average is providing minimal support just above the $3,400 level.
ETF Impact and Market Sentiment
Ethereum's spot ETFs, launched in August, were expected to fuel growth, but they have not met expectations. Currently, Ethereum ETFs hold approximately $11.98 billion, a small fraction compared to Bitcoin’s $109.66 billion. Additionally, there was a significant outflow of $60 million from Ethereum ETFs recently. Social sentiment surrounding Ethereum is at its lowest point in a year, though this could hint at a potential future rebound.
Futures Market and Sell-Offs
The futures market for Ethereum is showing signs of weakness, with a negative premium for the first time since November. A large $299 million sell-off occurred recently, marking the biggest drop since December 9. Additionally, the Ethereum Foundation’s sale of 100 ETH on December 17 led to a 17% price drop, raising concerns among investors.
Looking Ahead
Although Ethereum has bounced back by 12% from its recent low, its future remains uncertain. Some analysts are hopeful, expecting sentiment to improve, while others remain concerned about high ETH supply and investors’ preference for Bitcoin. Ethereum’s trajectory is unpredictable, and the market may still surprise investors.
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