Ethereum is facing a critical juncture as it approaches the $4,700 mark, a level that holds significant importance according to market analyst Kevin. This level is seen as the deciding factor that will determine whether Ethereum experiences a breakout to higher prices or faces a potential downturn.
Kevin emphasizes the importance of a clean break above this resistance level, supported by a strong weekly close and a break of the down-trending weekly RSI line. Failure to surpass this barrier could lead to a continuation of the pattern of weakening rallies that Ethereum has been experiencing in recent months.
The recent price action leading up to this test has been characterized by momentum and positive indicators, with money flow improving and promising patterns forming on various altcoins. However, the market’s lack of continuation during the Asia session and a macroeconomic shock in the form of the US Producer Price Index have hindered Ethereum’s progress.
The unexpected spike in the Producer Price Index, which exceeded expectations significantly, has raised concerns about potential inflationary pressures and their impact on the overall economy. This has led to fluctuations in rate-cut probabilities and added uncertainty to the market environment.
From a technical standpoint, Kevin emphasizes the need for Ethereum to confirm its breakout by surpassing the $4,700 resistance level decisively and neutralizing the bearish divergence that has persisted since early 2024. He warns that failure to do so could result in a corrective pullback, while success could pave the way for a sustained bullish trend.
Looking at the broader market structure, Kevin notes that the Total2 index, which includes Ethereum and other altcoins, failed to reach a crucial breakout trigger despite positive momentum. Stablecoin dynamics and seasonal liquidity factors also play a role in shaping market conditions, with September traditionally being a challenging month for investors.
In conclusion, Kevin advises traders to focus on the weekly Ethereum chart, the $4,700 resistance level, and the RSI trendline to gauge the market’s direction. The key decision point lies in Ethereum’s ability to clear this hurdle and signal a shift in momentum. Until then, caution is warranted, and traders should await a clear signal before making significant moves.
At the time of writing, Ethereum is trading at $4,619, with the outcome of the $4,700 test remaining uncertain. The market awaits further developments to determine Ethereum’s next move and the broader implications for the cryptocurrency market.