Ethereum Tests Critical $4,400 Support After Failed $4,800 Breakout Attempt
Ethereum is trading for about $4,400 right now, which is more than 4% less than it was 24 hours ago. This is a really important period for
Quick overview
- Ethereum is currently trading at approximately $4,400, down over 4% from the previous day after failing to break the $4,800 resistance level.
- Institutional confidence remains strong as Grayscale staked 32,000 ETH, indicating trust in Ethereum's long-term viability despite short-term price corrections.
- Technical analysis shows a bearish divergence, with critical support at $4,400; a drop below this level could lead to further declines towards $4,100-$4,250.
- The upcoming days are crucial for ETH bulls, as maintaining the $4,400 support is essential for continuing the uptrend towards the psychological $5,000 mark.
Ethereum ETH/USD is trading for about $4,400 right now, which is more than 4% less than it was 24 hours ago. This is a really important period for the second-largest cryptocurrency, which just went up from $3,800 to $4,700. The retreat happened because ETH couldn’t break above the $4,800 barrier level, which is significant for the mind, even though Bitcoin hit new all-time highs earlier this week.
Institutional Confidence Remains Strong Despite ETH Price Correction
Even though the price action in the short term is lackluster, institutional investors still believe in Ethereum’s long-term worth. Lookonchain’s on-chain data shows that Grayscale staked 32,000 ETH worth about $150.56 million through its ETHE and ETH ETF vehicles. This is one of the biggest institutional staking deals in the last few weeks, and it takes a lot of supply out of the liquid market.
The timing of Grayscale’s move is especially interesting because the market is so unstable right now. By putting so much money into staking, the asset manager shows that they trust not only the price of ETH but also the long-term viability of Ethereum’s staking economy as a way to make money. This choice fits with a larger trend in which institutional funds are using staking yields more and more as alternative income techniques in their crypto holdings.
ETH/USD Technical Analysis: Bears Test Key Support Levels
From a technical point of view, Ethereum’s chart shows a bearish divergence on the four-hour timeframe that came before Monday’s decline. This pattern usually means that buyers are losing momentum and generally means that short-term reversals or local peaks are coming. The asset tried to break over the $4,700-$4,800 resistance zone for the fourth time, but it didn’t work, which made traders take their profits.
Even if it fell back, ETH has stayed above the 50-day and 100-day moving averages, which shows that the overall uptrend is still going strong. The current $4,400 level is highly important support, and analysts say that this area has a lot of stop-loss orders that could cause a liquidity sweep before any possible recovery.
If Ethereum can’t stay above $4,400, the next big support zone is between $4,250 and $4,100, where a four-hour and one-day order block meet. These overlapping areas are places where institutional buy orders were previously placed, which means they are likely to see trend reversals.
Mixed Signals From Derivatives and Onchain Metrics
Market data shows that different trading venues are sending mixed signals. Spot cumulative volume delta (CVD) has declined a lot, which means that people in the spot market are selling to make money. But futures open interest and futures CVD are still high, which means that leveraged traders are still betting on volatility instead of closing off their holdings completely.
This difference often comes before big moves as people on the sidelines wait for the best times to get in. If the price bounces back strongly from the $4,400 support level, it would invalidate the current bearish pattern and might mean that the price will continue to rise toward the $5,000 psychological threshold.
The “Liquidity Lag” Thesis Gains Traction
XWIN Research says that the US M2 money supply has grown to an all-time high of $22.2 trillion. However, Ethereum’s response to this flood of liquidity seems less strong than Bitcoin’s. BTC has gone up more than 130% since 2022, but ETH has only gone up 15%. This is what analysts call a “liquidity lag.”
But some on-chain fundamentals point to the fact that Ethereum may be getting ready to close this performance difference. Exchange reserves have dropped to about 16.1 million ETH, which is more than 25% lower than they were in 2022. This shows that sell-side pressure has been steadily falling. Net exchange flows are still negative because ETH is moving into self-custody wallets and staking contracts, which lowers the amount of ETH that is available.
Ethereum Price Prediction: Critical Week Ahead for ETH Bulls
The next few days will be very important for Ethereum’s short-term path. To keep the current uptrend structure going, bulls need to protect the $4,400 support zone. If the price stays over $4,700 and then goes back down, it might break out toward $5,000 and maybe even find new highs above the prior ones.
On the other hand, if the price drops below $4,400, it would probably go down further more toward the $4,100-$4,250 area, where there is more support. This situation would be bad news for short-term bulls, but it would also generate a higher low structure that could be the base for the next big upward move.
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