Ethereum Price Analysis: ETH Gains 9% Weekly But The Road to $4K Has These Obstacles

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As a seasoned crypto investor with battle-hardened instincts and years of market analysis under my belt, I find myself intrigued by Ethereum’s current trajectory. The bullish momentum is undeniable, fueled by an influx of buyers that have propelled ETH toward the $4K resistance level.

The cryptocurrency Ethereum is exhibiting robust bullish energy, fueled by numerous buyers. Yet, as its value gets close to a substantial resistance point around $4,000, investors ought to be prepared for a spell of consolidation that could involve increased volatility.

Technical Analysis

By Shayan

The Weekly Chart

Ethereum has surged dramatically due to increased buying interest around the $2,500 support point. This surge has resulted in a breakthrough over the significant 100-day and 200-day moving averages, indicating a change in market feelings and underlining the buyers’ control. The asset is now close to encountering the $4,000 resistance area, an essential psychological and technical barrier that could be heavily defended by sellers.

The $4K threshold is a probable distribution zone for long-term holders looking to take profits. A consolidation phase around this level will likely give the market time to absorb selling pressure. However, a liquidity pool above $4K could trigger a short squeeze if breached, potentially driving Ethereum toward its all-time high of $4.9K.

The 4-Hour Chart

On a 4-hour scale, Ethereum’s price movements suggest a Wyckoff accumulation phase happening within the $2K to $2.8K zone. This phase concludes with a breakout and a rapid surge surpassing the significant resistance at $3.5K. Additionally, the asset has breached the upper limit of a bearish wedge formation, indicating a positive outlook. After this breakout, Ethereum experienced a retracement.

If this correction holds and buying pressure continues, Ethereum will likely extend its uptrend toward the $4K resistance. However, caution is warranted, as a bearish divergence between the RSI indicator and the price suggests a waning bullish momentum. This divergence indicates that the market may face a period of consolidation before determining its next significant move.

Onchain Analysis

By Shayan

The price action of Ethereum, notably its resistance to dip below $3.3K, seems consistent with substantial liquidity at that level, as evidenced by the Binance liquidation heatmap. This liquidity appears to be composed mainly of stop-loss orders and liquidation thresholds for big traders, or “whales,” who are likely taking steps to safeguard their investments by preventing a chain reaction of liquidations.

Similarly, the $4K level is another critical juncture with substantial liquidity, likely tied to short positions established in anticipation of resistance. Should the asset breach the $4K level, these shorts may be forced to cover their positions, triggering a short-liquidation cascade. This could lead to an impulsive surge, as those positions are unwound, and the market quickly moves higher.

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2024-12-03 16:04