Ethereum's price has risen by nearly 20% over the past seven days, easily surpassing the $4,000 mark that many are watching. It is now trading at $4,310, with ETH's price sitting just 11.7% below its all-time high of $4,878.
But this peak may be closer than you think, with two strong groups aligned that could push it there.
Spot buyers are keeping Ethereum's supply tight
One of the key indicators to watch during a strong bullish trend is exchange reserves, which is the total amount of ETH held on centralized exchanges. When reserves are high, there is potential for greater selling pressure. When they are low, supply is tight, and any increase in demand can rapidly push prices up.
On July 31, Ethereum reserves on exchanges hit an all-time low of 18.72 million ETH. As of August 12, they remain close to this level at 18.85 million ETH, despite ETH's sharp rise. This tells us something crucial: even with Ethereum's price pushing towards its highest levels in months, the struggle between buyers and sellers leans toward the former.
Note that aggressive selling is occurring, but low reserves on exchanges mean that buyers are quickly outpacing sellers.
Historically, ETH's price has struggled to maintain highs when reserves rise. The fact that reserves are holding at low standard levels while the price is close to breaking its latest major resistance suggests ongoing buying interest from the spot market.
Derivatives traders are building positions
If the spot market is the foundation, then derivatives are the accelerator. Open interest, which is the total value of outstanding futures and perpetual contracts, reached an all-time high of $29.17 billion on August 9 and continues to hover near this level.
Why does this matter? Increasing open interest raises the likelihood of successive moves. If Ethereum's price breaks a significant resistance, short-backed positions may be forced to cover, creating short pressure that enhances bullish momentum.
Conversely, if the bulls lose control, heavy leverage could also accelerate a downward trend. But for now, with tight spot supply, the setup favors upward pressure.
The combination of low standard reserves and high standard open interest means that both groups, spot buyers and derivatives traders, are in agreement in a way that could fuel a sharp upward move.
Key levels of Ethereum's price to watch: a stop could lead to a new peak
From a technical perspective, Ethereum is trading within a bullish continuation pattern (ascending triangle), with main resistance at $4,468, which is the 2.618 Fibonacci extension of its recent high.
A clean break above this level would easily put the previous all-time high of $4,878 within reach.
With Fibonacci levels acting as resistance lines for the ascending trendline, Ethereum's price has managed to break out of the ascending triangle on several occasions, on its way to a monthly high.
If the bulls surpass $4,468, which is another breakout area, the next Fibonacci target lies near $4,893, essentially indicating a new all-time high. On the downside, immediate support lies at $4,043; losing that could open the risk of a deeper retracement.