Ethereum (ETH) has recently made waves in the cryptocurrency market by surging past the $4,000 mark, reaching an intraday high of $4,237. This significant milestone represents Ethereum’s strongest performance since December 2021, indicating a resurgence of bullish momentum in the market. Various factors, including institutional inflows and technical breakouts, are driving this rally, leading traders to anticipate the next crucial move for the popular cryptocurrency.
Institutional demand, particularly through Ethereum Exchange-Traded Funds (ETFs), has played a pivotal role in Ethereum’s recent price surge. ETFs have attracted approximately $1.99 billion in net inflows since July, with BlackRock’s ETHA ETF alone receiving $727 million in a single day. Additionally, the decrease in ETH reserves on centralized exchanges to just 12.3 million, the lowest level since 2018, suggests a decrease in selling pressure and a stronger sentiment towards long-term holding.
Corporate treasuries have also shown increased interest in Ethereum, with small publicly traded companies now holding nearly 1 million ETH, valued at around $3.5 billion. This significant increase from just 116,000 ETH at the end of 2024 reflects growing confidence in Ethereum as a valuable asset. Furthermore, a substantial short squeeze occurred as ETH approached $4,200, resulting in the liquidation of over $183 million in short positions. This forced bearish traders to cover their positions, adding further buying pressure to the already bullish market.
From a technical standpoint, Ethereum has broken above a multi-year ascending triangle that has been forming since 2021. The measured move from this pattern’s height (~$1,600) suggests a long-term target in the $6,000–$6,200 range if momentum is sustained. Currently, Ethereum is testing $4,425 as an intermediate resistance, with the 2021 all-time high of $4,820 just above. A decisive weekly close above $4,820 could trigger a rapid rally towards $5,500, with $6,000 as a potential target if buying pressure remains robust.
The former breakout level around $4,000–$4,050 now serves as a critical support zone. Any healthy pullback that stays above this level could set the stage for another upward movement towards $4,425 and eventually $4,820. The weekly RSI is currently at 69.6, indicating strong bullish momentum but nearing overbought territory. Traders should monitor the RSI for signs of potential bearish divergence as Ethereum approaches the $5,500+ range.
A rising trendline from 2020, situated near $3,200, continues to support Ethereum’s macro bullish structure. As long as ETH remains above this trendline, the broader uptrend remains intact, potentially paving the way for a target above $6,000 in the upcoming market cycle. In the event that Ethereum fails to hold above $4,000, a pullback towards $3,800 could be expected before another attempt at an upside breakout. However, sustained momentum could see Ethereum reaching new multi-year highs in the near future.