Ethereum (ETH) has faced difficulty breaking the $4,000 price point since March 2024, encountering rejections three times. Currently at $3,475, ETH has dropped 24% recently from $4,087 to $3,097. Although there was a small bounce, the overall outlook remains grim.
Challenges at $4,000 Resistance
The $4,000 level has become a significant barrier for ETH. Despite some bounce-back from the recent dip to $3,097, the trading volume has decreased by almost 15%, indicating weak market interest. The relative strength index (RSI) is neutral at 52.64, signaling stagnant market movement, while the 20-day moving average provides minor support above $3,400.
ETF Impact and Market Sentiment
Ethereum’s spot ETFs launched in August were expected to drive growth, but they haven’t had the desired effect. Currently, ETH ETFs hold about $11.98 billion, a fraction of Bitcoin’s $109.66 billion, and there was a significant outflow of $60 million from ETH ETFs recently. Social sentiment around Ethereum is also at its lowest in a year, although this may indicate potential for a future bounce.
Futures Market and Sell-Offs
Ethereum’s futures market is showing signs of concern, with a negative premium for the first time since early November. A massive $299 million sell-off occurred recently, the largest since December 9. Additionally, the Ethereum Foundation’s sale of 100 ETH on December 17 caused a 17% price drop, raising doubts among investors.
Looking Ahead
While ETH has rebounded by 12% from its recent low, the future remains uncertain. Some analysts are optimistic, expecting sentiment to turn positive, while others worry about high ETH supply and a preference for Bitcoin among investors. Ethereum’s path forward is unpredictable, and the market could surprise investors.
