Bullish candles change beliefs; two bullish candles change perspectives. Today's violent surge in Ethereum has driven the entire crypto space into a frenzy.
Today at noon, the price of Ethereum broke through the $4,200 mark, reaching a high of $4,246.
Ethereum's performance compared to Bitcoin is even more impressive, with the ETH/BTC exchange rate soaring to 0.036, a 103.7% surge from its April low. Old players in the crypto space know that when ETH starts to outperform BTC, the real altcoin season is not far away.
This is also the fourth time in eight years that Ethereum has attempted to break through the $4,000 mark.
Today's breakthrough is not an isolated event, but a climax of ongoing efforts. The price structure of ETH perfectly replicates the bull market breakout model from May to June 2025.
After breaking the $4,000 double top resistance level, ETH's new target is directly aimed at $5,000. Because the price area above $4,200 is truly a 'no man's land' for Ethereum. Once it effectively breaks through and stabilizes, the upward space will be completely opened, making $5,000, $6,000, or even $8,000 possible targets.
Three major factors drove this surge in the second coin!
1. Technical upgrades: The power of Ethereum 2.0 is beginning to show.
The transition of Ethereum to 2.0 has become a core catalyst. The introduction of sharding technology and the PoS consensus mechanism is systematically addressing the long-standing issues of network congestion and high gas fees.
On the roadmap, plans to significantly lower the verification threshold from 32 ETH in the second half of 2025 will attract more validators and further enhance the decentralization of the network.
What’s more exciting is the plan to introduce zkEVM to the mainnet. This technology will bring up to a 100-fold increase in efficiency, completely reshaping the Ethereum virtual machine architecture.
2. Institutional entry: ETFs change the game.
Institutions like BlackRock and Fidelity are continuously accumulating spot ETH ETFs. U.S. spot ETF institutions collectively hold about 5.038 million ETH, with BlackRock alone holding 2.461 million ETH and continuously adding to their positions, injecting confidence into the market and attracting more capital inflows, forming an institution-driven bull market cycle.
3. Market sentiment: Shorts are being crushed.
Today's breakthrough comes with a brutal short liquidation. The derivatives market experienced a single-day liquidation of $260 million, with 90% being forced short positions.
After breaking $4,200, market FOMO sentiment was completely ignited. Professional investors have shifted to bullish positions, further strengthening market optimism.
Market outlook: Where is the target?
Technical analysis: The road to $5,000.
From a technical chart perspective, the current trend is remarkably similar to the 2020 bull market. ETH is now just one decisive bullish candle away from a complete breakout; the first target of $4,220 was reached today, with the next target aimed at $4,800. The historical high of $4,877 is a battleground for bulls and bears. Once effectively broken, the psychological barrier of $5,000 will be rapidly tested.
Fundamentals: Support from ecological prosperity.
The explosion of Ethereum is not just a price phenomenon, but a result of ecological prosperity. Currently, about 28% of the total supply of ETH is staked, with protocols like Lido and Ether.Fi promoting the popularity of staking.
The DeFi ecosystem continues to expand, with established protocols rejuvenating: AAVE's lending volume and Uniswap's trading volume have surged with the maturity of L2 solutions. The total locked value (TVL) in Layer 2 has surpassed $30 billion.
How should ordinary investors respond?
In the short term, go with the trend.
In the breakout market, key support has shifted to the $4,000-$4,050 range. This range can be used as a stop-loss reference; if maintained, the trend remains unchanged.
In position management, avoid heavy one-time positions. Use a 'buy on the dip' strategy to build positions in batches during daily level retracements.
Long-term holders focus on ecological dividends:
Core positions should be held firmly. For ETH spot, it is recommended to allocate 50%-70% of positions to enjoy the ecological development dividends.
Layout ecological value spillover, focus on leading Layer 2 tokens (like ARB, OP), DeFi blue chips (UNI, AAVE), and liquidity staking protocols (Lido).
Participate in staking to obtain stable returns. As the verification threshold lowers, ordinary users will find it easier to participate in staking, with expected annualized returns of 6%-8%.
Behind the 103.7% surge in the ETH/BTC exchange rate is the reassessment of Ethereum's ecological value. Technicians see a breakout in candlestick patterns, fundamental researchers see the efficiency revolution brought by Ethereum 2.0 upgrades, and institutional investors see the liquidity dividends of ETFs.
The market's gaze has shifted to $5,000. However, historical experience reminds us that after the bull market frenzies of 2017 and 2020, there were pullbacks of over 40%.
The long-term outlook remains bullish, and breaking the 10,000 mark in the future is a certainty. Focus on risks in the short term, and be cautious of leverage risks!
