Ethereum’s price is in a critical zone near $4K, facing resistance but also showing signs of consolidation. While the market remains bullish overall, short-term fluctuations within the $3.5K-$4K range are expected before a potential breakout or deeper pullback.

Technical Analysis

By Shayan

The Daily Chart

Ethereum has made impressive progress, surging toward the psychological $4K resistance region. This price level coincides with Ethereum’s yearly high and is a strong area of selling pressure. Recently, the rejection at this line has caused a slight decline, signaling that the resistance is proving difficult for buyers to overcome.

After the correction, the market entered a period of low volatility, suggesting a short-term consolidation phase. This phase could last within the $3.5K-$4K range as buyers and sellers reach a standoff. The RSI indicator’s bearish divergence supports the notion of an overbought market, reinforcing the likelihood of this corrective stage.

While the price has faced some resistance, ETH ($3,925.49) buyers will likely make another attempt to push past $4K. However, before that, a period of sideways movement is expected as the market digests the recent gains.

The 4-Hour Chart

On the 4-hour timeframe, ETH maintains a bullish market structure, consistently forming higher highs and higher lows. Despite the rejection at $4K, the overall trend remains upward, as Ethereum has been trending within an ascending price channel.

The failure at the $4K resistance zone has led to a period of consolidation, with the asset hovering just below this critical level. The lower boundary of the ascending channel, currently around $3.7K, provides short-term support. If the price continues to maintain it, a bullish surge toward the $4K threshold is likely.

On the other hand, a break below the channel’s lower trendline could indicate weakening bullish momentum, with a possible pullback toward the $3.5K support level in the mid-term. However, if buyers manage to defend it, another attempt to break $4K could be imminent.

Onchain Analysis

By Shayan

Ethereum’s Funding Rates metric, reflecting futures market sentiment, has surged to its highest level in months, coinciding with a significant price rally. This highlights strong bullish sentiment, with traders anticipating new all-time highs. However, the market may require a correction to sustain this momentum.

Funding rates are at levels last seen in January 2024, when Ethereum rallied by 88%. This reflects increased long-position interest as optimism grows. Similar to January, this sharp increase suggests the likelihood of a pullback, allowing the market to stabilize and avoid excessive volatility.

While Ethereum’s rally is underpinned by bullish sentiment, the spike in funding rates signals the need for a short-term correction, paving the way for healthier and more sustainable price growth.

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