Ethereum (ETH) continues to face significant resistance at the $4,000 mark, with its price slipping to $3,874.36 after a 6.35% decline from its weekly high of $4,109. This drop follows the formation of a bearish engulfing pattern on Ethereum’s daily chart, signaling potential downside movement. The $4,000 level has become a major hurdle for ETH in 2024, marking its third rejection at this price point this year.
ETH’s Struggle at the $4,000 Resistance Level
As illustrated in recent price charts, $4,000 has proven to be a robust resistance level for Ethereum, with the altcoin testing it five times since 2021, and three times in 2024. Despite bullish expectations, Ethereum has failed to break past this critical resistance level on all occasions. As the crypto market watches for a breakout, ETH’s struggle to surpass this price point raises concerns about the sustainability of its uptrend.
Ethereum Futures Traders Turn Bearish
Ethereum’s futures market shows signs of shifting sentiment. Data from CoinGlass reveals that Ethereum’s open interest in futures contracts reached a new all-time high of $28.70 billion on December 17. However, the once-dominant long positions that characterized November’s bullish rally are now giving way to more short positions. The aggregated futures premium has turned bearish for the first time since November 6, indicating that more traders are betting against Ethereum’s price. This shift has contributed to ETH’s drop below the $4,000 threshold, with the long/short ratio falling to 0.9 between December 16 and 17.
Key Technical Levels for ETH
Despite the recent bearish sentiment, Ethereum’s market structure remains intact with higher highs and higher lows. Technical analysis suggests that ETH may now retest the support zone between $3,715 and $3,628, where a fair value gap (FVG) aligns with the 200-day EMA. This area is crucial as it also houses over $500 million in long liquidation leverage positions, making it a potential target for price reversal after a liquidity sweep.
However, the concentration of short-leveraged positions between $3,850 and $4,200 means Ethereum might experience volatile price action in the short term. As futures market analyst Byzantine General notes, this choppy behavior could persist before a clear trend emerges.
Also Read: Ethereum Price Surges to $4K as Whale Nets $5M in 3 Months: Bullish Momentum Builds
Ethereum’s price remains caught in a battle between bullish and bearish forces. The $4,000 resistance continues to thwart upward momentum, while futures data suggests a shift towards a bearish outlook. Traders and analysts will be closely watching key support levels in the coming days to determine whether Ethereum can maintain its long-term uptrend or face further corrections.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
