Ethereum Struggles to Break $4,000—What’s Really Holding It Back?
Ethereum (ETH) has been struggling at the $4,000 price level for several months. Since March 2024, it has been rejected 3 times. Currently, the ETH price is $3,475, and while there has been a slight improvement, ETH is still down 24% over the past few days, from $4,087 to $3,097. Even if there is a small rebound, the overall picture does not look good. So, why is Ethereum struggling so much lately?
Why Ethereum Can’t Break the $4,000 Wall?
$4000 is like a brick wall for Ethereum. Every time it gets close, the price falls back. Recently, ETH dropped to $3,097 but has managed to rebound to $3,475. Still, things don’t look promising. Trading volume is down nearly 15%, indicating that traders are not too excited at the moment. The relative strength index (RSI) is at 52.64, which means the market is neutral but not moving much. While the 20-day moving average has helped ETH stay above $3,400, breaking above $4,000 remains a challenge.
ETFs won’t help Ethereum’s case
When Ethereum spot ETFs were launched in August, expectations were high for them. Unfortunately, they don’t really have the impact people were hoping for. The U.S. spot ETH ETF currently holds about $11.98 billion, which is minuscule compared to Bitcoin’s $109.66 billion ETF. Just yesterday, the ETH ETF saw $60 million in outflows, its largest outflow since mid-November. On top of that, social sentiment around Ethereum is at its lowest point in a year. But here’s the thing – sometimes these lows are actually signs that ETH may rebound soon.
Futures and funds sell-off adds to drama
Things are not looking good in the futures market either. Ethereum futures are in negative premium for the first time since early November. For many traders, this is a worrying sign. Then, there was a massive sell-off yesterday, with $299 million being liquidated in one fell swoop. This is the largest sell-off since December 9. The Ethereum Foundation dumped 100 ETH on December 17, adding fuel to the fire. This sell-off near local highs raises some serious concerns.
What’s next for Ethereum?
So, what can we expect? On the bright side, ETH has rebounded about 12% from recent lows, so a short-term recovery is likely. But analysts are divided. Some believe market sentiment could turn positive and drive ETH higher, while others are concerned about issues such as high ETH supply and the shift of many investors towards Bitcoin.
The future of Ethereum remains uncertain, but as always, the market full of surprises.
