Ethereum, the second-largest cryptocurrency by market capitalization, has faced challenges in reclaiming the critical $4K resistance level, leading to a notable decline in its price. However, the cryptocurrency has found support at the $3K level, where a rebound followed by consolidation is expected. The $4K price region has been a significant resistance zone for Ethereum over the past year, consistently stopping bullish advances. The recent rejection at this level, combined with Federal Reserve Chairman Jerome Powell’s comments on interest rates, triggered a sell-off. Despite this setback, ETH is currently consolidating within the $3.5K–$4K range, with potential for a bullish attempt to retest the $4K resistance after consolidation.
On the 4-hour chart, Ethereum’s rejection at the $4K resistance level led to a sharp decline, breaking below the ascending wedge pattern and indicating sellers’ dominance. The cryptocurrency is now trading within a significant support zone defined by the 0.5 ($3.2K)–0.618 ($3K) Fibonacci retracement levels. This support is expected to provide stability in the short to mid-term, with the possibility of continued consolidation and minor retracements. If this support holds, buyers may re-enter the market, setting the stage for another challenge of the $4K resistance level. The failure to reclaim $4K triggered significant liquidations in the futures market, followed by a flash crash that cooled sentiment.
The funding rates metric, a indicator of futures market sentiment, saw a sharp spike last week but decreased following Ethereum’s rejection at $4K, bringing funding rates to levels conducive to a bullish trend. This cooling effect could lead to a more sustainable rally in the weeks ahead, similar to the market reset observed in January 2024 before Ethereum’s major impulsive rally. This historical precedent suggests that the current market reset may mark the beginning of another bullish phase for Ethereum. Overall, while Ethereum faces challenges in reclaiming the $4K resistance, finding support at $3K and consolidating in the $3.5K–$4K range could pave the way for a potential bullish attempt in the near future.
In summary, Ethereum has struggled to reclaim the critical $4K resistance level, leading to a significant decline in price. However, the cryptocurrency has found support at $3K, where a rebound followed by consolidation is expected. The $4K price region has been a key resistance zone for Ethereum, repeatedly halting bullish advances. Despite recent setbacks, ETH is currently consolidating within the $3.5K–$4K range, with potential for a bullish attempt to retest the $4K resistance after consolidation. The rejection at $4K triggered liquidations in the futures market and a flash crash that cooled sentiment, but decreased funding rates could lead to a more sustainable rally. This market reset may signal the beginning of another bullish phase for Ethereum in the coming weeks.
