Ethereum continues to impress, approaching the $4,000 level. However, analysts warn of certain signs of market overheating.
Technical Analysis
The daily chart indicates that ETH's price has significantly rallied following its rebound from the $2,100 support level. The cryptocurrency has broken above both the 100-day and 200-day moving averages, providing a bullish signal. However, the RSI indicator has remained in the overbought region for an extended period and shows divergence with the recent price highs.
A pullback towards the $3,300 support level could occur before a potential breakout above the previous high of $4,107.
On-Chain Analysis
Recent data on Ethereum fund holdings shows a sharp and sustained increase, exceeding 5.3 million ETH, the highest level recorded. This is indicative of growing institutional confidence in Ethereum, likely fueled by its improving price structure and an increased narrative surrounding ETH ETFs.
Additionally, the rise in fund holdings aligns with price trends, signaling that institutions are becoming more active in responding to market momentum.
Conclusion
In light of the rising fund activity and increasing demand, Ethereum approaches a critical resistance level at $4,000. However, potential risks due to market overheating warrant caution among investors.
Thus, Ethereum exhibits strong growth, inching towards the pivotal $4,000 resistance level, but investors should stay alert to potential risks.
