Recently, Ethereum faced challenges breaking through $4K, highlighting seller resistance. A potential pullback to $3.5K might attract new buyers.
The Daily Chart
Ethereum recently faced another rejection at the crucial $4K resistance level, underscoring the strong presence of sellers. This creates a challenging environment for buyers aiming to continue the uptrend and reach a new all-time high. Signals of a possible reversal, including a double-top formation, indicate the potential for a retracement toward the $3.5K support zone. Ethereum remains range-bound between $3.5K and $4K, with a breakout possible following the consolidation phase. A bullish breakout above $4K could lead to further upward momentum.
The 4-Hour Chart
On the 4-hour chart, renewed strength in ETH was observed as buyers stepped in near the lower boundary of the ascending channel. This buying activity sparked a fresh rally, driving the price toward the channel's middle boundary, which aligns with the critical $4K resistance level. However, the asset faced rejection again and declined, oscillating between the lower boundary of $3.7K and the $4K resistance. In the mid-term, a bearish retracement toward the lower boundary followed by a renewed attempt to reclaim the $4K resistance seems likely. A successful breakout above this level could signal the continuation of Ethereum's bullish trend.
On-chain Analysis
This chart illustrates Ethereum’s Binance liquidation heatmap, highlighting potential price levels where significant liquidation events could occur. The clustering of liquidation levels within a specific range suggests that the price will likely move toward that zone. A notable concentration of liquidity just above the critical $4K resistance represents the liquidation levels for short positions. This makes the $4K region an attractive target for whales and large institutional players, increasing the likelihood of a bullish breakout in the mid-term.
The situation in the Ethereum market remains uncertain, with both a pullback and an upward breakout possible. Investors are watching the critical $4K level, which remains a decisive barrier for the cryptocurrency's further growth.
