Despite the strong performance of Ethereum during May and July, with an increase of over 40%, the second largest cryptocurrency by market cap still faces fierce resistance at the $4000 level. This technical and psychological barrier has become a focal point for market analyses, amid questions about the true reasons behind Ethereum's failure to break through it, and what might happen if it is breached.
📉 The mysterious resistance: What lies beyond $4000?
According to an analysis published by trader and analyst Glen Goodman, the primary reason for price pressure at the $4000 level is not only due to technical factors but also to the strategies of hedge funds dealing with Ethereum from a put options perspective.
These institutions are opening massive short positions on Ethereum and using options tools to control price movements. As Ethereum approaches the $4000 level, it is pushed down through organized selling pressure, aiming to maintain their profits from the premiums paid by buyers.
🧠 How does this strategy work?
- Hedge funds are selling call options on Ethereum, profiting from the premiums as long as the price stays below $4000.
- Buyers are betting on the price breaking this level, which would give them significant profits if that happens.
- Every time Ethereum approaches $4000, selling pressure is activated to maintain the current status.
This behavior creates artificial resistance, but it is not sustainable in the long term, especially with increasing market momentum and liquidity flowing towards alternative coins.
📈 What does breaking $4000 mean?
If Ethereum can break this barrier, the implications will be significant:
- Immediate losses for hedge funds betting against the rise
- Huge profits for buyers who invested in call options
- A shift in market structure, with momentum moving from resistance to breakout
- The possibility of reaching historical levels like $4800 – $5000
🔍 Technical and market context
Technically, the $4000 level represents strong resistance that has been tested multiple times without breaking. With each new attempt, the likelihood of surpassing it increases, especially in light of:
- Increased open interest in Ethereum contracts
- Increase in trading volume and active addresses on the network
- Improvement in funding indicators, reflecting dominance on the buying side
💬 Analytical summary
The $4000 level is not just a number — it is a strategic turning point in Ethereum's trajectory.
The potential breakthrough of this barrier could reshape the market and unleash a new upward wave led by Ethereum, benefiting alternative coins.
In this scenario, the most important question remains:
Is Ethereum preparing to break the siege? Or will hedge funds succeed again in keeping the price under control?
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