Ethereum Price Analysis: When Will ETH Cross $4,000?

The world’s second-largest cryptocurrency, Ethereum (ETH), has experienced a notable decline, dropping to $3,337 on December 26, wiping out gains from previous trading sessions.

Ethereum Price Analysis: When Will ETH Cross $4,000?
Ethereum price analysis

The downward movement coincided with a broader market correction that saw Bitcoin retrace by 4%, resulting in $34 million in liquidated ETH long positions.

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Ethereum’s Developer Activity and Ecosystem Growth

The Electric Capital Developer Report reveals significant shifts in the blockchain development landscape. While Ethereum maintains its position as the leading smart contract platform, Solana has emerged as a serious competitor, marking the first time in eight years that another blockchain has challenged Ethereum’s dominance in attracting new developers.
Notable ecosystem metrics:

  • 56% of Ethereum developers are now focused on Layer 2 solutions
  • Total Value Locked (TVL) remains stable at approximately 20 million ETH
    DeFi protocols showing mixed performance, with Ethena up 49% and Maker down 12% over the past month

Global Macroeconomic Factors

The wider economic climate still greatly affects crypto prices. At 108.3, the US dollar index (DXY) has hit a two-year high showing growing investor risk aversion. Concerns have been raised by recent employment statistics; the Philadelphia Fed estimates possible downward adjustments of 818,000 payrolls across 25 states through March.

ETH/USD Technical Analysis

ETH/USD

 

Deratives markets keep a cautiously hopeful attitude despite the ETH/USD price drop, implying that a breakthrough beyond $4,000 is still feasible. Slightly surpassing the usual neutral range of 5-10%, the monthly futures contracts are trading at an 11% premium over spot prices, suggesting continuous optimistic attitude among traders.

Key technical indicators paint a complex picture:

  • Strong support level established at $3,300
  • Critical resistance zone between $3,420 and $3,500
  • MACD showing increasing bearish momentum
  • RSI trending below the 50 mark, suggesting short-term bearish pressure

Ethereum Price Prediction

Although short-term technical signs point to further pressure, numerous elements support a possibly positive medium-term view:

  • Stable Chinese stablecoin markets trading at parity
  • Sustained developer activity and ecosystem growth
  • Resilient DeFi metrics despite market volatility

Still, there are immediate challenges:

  • Strong resistance at $3,500 needs to be overcome for continued upward momentum
  • Global economic uncertainties could limit risk appetite
  • Potential support levels at $3,250 and $3,110 if current support fails

Though technically feasible, the road to $4,000 will probably rely on broader market conditions and macroeconomic developments in the coming weeks.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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