Can Ethereum break $4000 this year? The market is highly divided, but technical upgrades and favorable policies have indeed opened up possibilities.
Here is the analysis of key variables:
Technical Upgrades: The Acceleration Engine Has Started
The Prague upgrade completed in May optimized the execution efficiency of smart contracts, reducing Gas fees by over 30%. If the Cancun upgrade includes the scheduled shard technology testing module in November, transaction speeds are expected to increase by 5-8 times. These two upgrades are like equipping Ethereum with twin turbos, but it should be noted that the shard technology is still in the verification phase, and development progress may affect market confidence.
Policy Variables: Dual Drivers of ETFs and Strategic Reserves
The Trump administration has signaled consideration of including Ethereum in the national strategic reserves, coupled with institutions like BlackRock heavily investing in spot ETFs. If the SEC approves an Ethereum ETF within the year, it could replicate last year's Bitcoin doubling trend. However, regulatory games are still ongoing, and the SEC's stance on staking mechanisms remains a critical variable.
Competition and Macroeconomics: A Double-Edged Sword
New public chains like Solana are seizing market share, with Ethereum's DeFi locked value ratio dropping from 70% to 58%, intensifying ecosystem outflow pressure. At the same time, expectations for a shift in the Federal Reserve's monetary policy are rising; if economic data underperforms and triggers a rate hike restart, risk assets may collectively come under pressure. Technically, if ETH loses the support level of $2200, it may test the strong support zone of $1800.
Core Observation Points and Strategies
Three major conditions must be met for Ethereum to hit $4000:
1. The Cancun upgrade's technical indicators meet standards, the spot ETF is approved in Q3, and Bitcoin stabilizes at $100,000, boosting market sentiment.
2. If all three are fulfilled, ETH is expected to challenge $5000; if any link fails, the price may retreat to the $2000-$2500 range.
3. Retail investors can adopt the strategy of "building positions in batches below $2200, and adding to positions upon breaking $3000," reserving 30% of their positions for black swan events.
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