Ether (ETH) bulls are facing a critical juncture as the cryptocurrency's rally recently peaked at $4,800, a level that has proven to be a significant resistance. After failing to break this ceiling, ETH experienced a sharp 3% correction, falling below $4,500 on Tuesday. This pullback has created uncertainty in the market, leaving investors wondering if this is a temporary setback or the beginning of a more substantial correction.
Currently, ETH is trading around $4,512.1, down 0.16% in the last 24 hours. Despite the recent dip, ETH has shown an increase of 10.93% over the last week and 9.49% over the past month, demonstrating underlying strength. However, the failure to breach the $4,800 resistance has introduced a note of caution, leading to reassessments of risk among investors.
Technical analysis suggests that the recent price action may be indicative of weakening momentum. A bearish divergence on the four-hour chart signaled that buyers were losing strength, often preceding a local top or short-term reversal. The $4,800 level has been tested multiple times without a successful breakout, reinforcing its significance as a key area to watch. Crypto trader Skew noted that the recent rally marked the "fourth tap" of the $4,700-$4,800 zone. If ETH manages to hold this area, "that would be pretty bullish". If not, a deeper pullback could form a higher low, potentially setting up the next leg upward.
On-chain data presents a mixed picture. Spot cumulative volume delta (CVD) has dropped sharply, indicating net selling pressure in the spot market. Conversely, futures open interest and futures CVD have remained elevated, suggesting that leveraged traders are still actively participating. Exchange reserves have fallen to around 16.1 million ETH, down over 25% since 2022, reflecting a sustained decline in sell-side pressure. Net exchange flows remain negative, indicating that ETH is moving into self-custody and staking, reducing available supply.
Several factors could influence ETH's price in the near term. Ethereum's price changes due to global supply-and-demand dynamics in decentralized markets. Variations in network usage, protocol upgrades, and ecosystem adoption can all influence value. Notable upgrades and new applications often coincide with shifts in ETH price, reflecting changing sentiment in the broader crypto ecosystem. Positive developments associated with the protocol can boost the price of ETH, while negative developments can lead to a decline.
Looking ahead, the ability of ETH to rebound from the $4,400 level could reset bullish momentum toward new highs. A confirmed close above $4,740 could pave the way to $4,950 or potentially new all-time highs. However, losing the $4,600 level may trigger a deeper correction toward $4,200.
The broader market context also plays a crucial role. Bitcoin's recent rally to new all-time highs has had a mixed impact on ETH. While some analysts anticipate an "altseason" driven by ETH gains, others point to a "liquidity lag," where ETH has not kept pace with Bitcoin's surge. According to XWIN Research, the US M2 money supply has expanded significantly, but Ether has not responded as strongly as Bitcoin.
In conclusion, Ethereum is at a pivotal moment. The coming days will be critical in determining whether ETH can overcome the $4,800 resistance and resume its upward trajectory, or if a more significant correction is in store.
