The hottest topic in the crypto circle last night was how ETH shot up from $3900 to the $4000 level as if it were on fire. Some pounded their thighs shouting, "The bull is back fast," while others sneered, "Retail investors are taking the bait." But what is the truth? Let's break it down—

What hidden tricks are behind the three major "drivers" of this surge?

Market sentiment: BTC is the "leading big brother," while the Federal Reserve is the "atmosphere group."
Recently, BTC has surged to $117,600 as if it were on steroids, becoming a real "stabilizing force in the crypto market." Why? The Federal Reserve's July meeting basically confirmed no interest rate hikes, with CME data showing a 95.3% probability of maintaining rates. Once funds saw "no rate hikes = liquidity," they immediately flowed from the stock market and gold into the crypto market. More crucially, the U.S. just signed the (GENIUS Act), legalizing institutional purchases of crypto assets. Giants like BlackRock and Grayscale have been buying ETH through ETFs at a staggering $2.2 billion in a single week. With this money pouring in, how can ETH not rise?

On-chain ecosystem: The ETF is coming, with staking volume exceeding 40 million coins.
The SEC has recently loosened its approval for Ethereum ETFs, with six institutions updating their applications, with rates as low as 0.19%-0.2%, cheaper than buying funds. Once approved, traditional funds will flood in like a tide, and institutions have long started to "secretly prepare" their layouts. Moreover, the current staking volume of ETH exceeds 40 million coins, with annual yields of 4.5%-5.5%, meaning 11,000 ETH are being "locked up" daily, leading to a decreasing supply. Once the deflationary effect kicks in, how can the market not be bullish?

$3900 is the "iron bottom," and $4000 is the "psychological warfare."


ETH has been tested 8 times near $3900 without breaking down. The weekly Bollinger Band's middle line and the moving average system are fused here, forming an "impenetrable wall." Bulls see this bottom as firm and directly enter the market. Once the psychological level of $4000 is broken, shorts get squeezed, resulting in a single-day increase of 8.7%, with trading volume hitting $23.7 billion, directly sending the price skyrocketing.

How will the market move? Short-term focus on "CPI data," medium-term focus on "ecosystem upgrades."

Short-term (within 3 days): either surge to $4100 or pull back to $3900
Currently, $4000 is the key watershed. If it stabilizes and trading volume exceeds $15 billion, there is a high probability of surging to the resistance level of $4067. After breaking through, the target is $4100-$4200. However, if $4067 cannot be broken after prolonged attempts, it may pull back to $3950-$3900, with $3894 being the "line of life and death." If it falls below this, it will turn weak and directly plunge to $3700.

Medium-term (within 2 weeks): CPI data and EIP-7732 are the "deciding factors."
On August 13, the U.S. will announce CPI data. If inflation drops to 2.5%, risk assets will soar, and ETH may surge to the previous high of $4500. If the data exceeds expectations, a pullback is expected. Moreover, Ethereum will upgrade to EIP-7732 in the second half of the year. After improving staking efficiency, DApps will emerge like bamboo shoots after rain, and as the ecosystem thrives, prices will naturally rise.

Qing Yao suggests: Don't be a "gambler," be a "hunter."

  • Aggressive: After breaking $4067, take a light long position with a stop loss set at $3980 and a target of $4100-$4200.

  • Conservative: Short near $4067 when under pressure, with a stop loss at $4100 and a target of $3950-$3900.

  • Steady: Wait until the CPI data is released before taking action. If the data is good, buy near $4000; if the data is bad, wait to bottom out at $3800.

Finally, let's speak some hard truths:

In this wave of ETH's rise, institutions are "openly building roads," while ecosystem upgrades are "secretly preparing." Retail investors who do not look at on-chain data and only focus on K-lines will eventually get cut. Now the question is: do you think ETH can rise to $4500?