Analyzing Ethereum's $4,400 test - Could THESE differences indicate a bullish sign or a trap for sellers?
Ethereum [ETH], the second-largest cryptocurrency by market capitalisation, is currently testing the $4,400 resistance level on the charts. This resistance zone has been a significant hurdle in the past, triggering reversals for ETH. However, recent technical strength and positive long-term on-chain signals suggest that a breakout above $4,400 could be feasible.
The structure and on-chain data of Ethereum appear to favour a breakout, despite overbought RSI conditions. Ethereum's surge past $4,600 has been driven by record network usage, high active addresses, and rising institutional interest, indicating robust fundamental and technical support for higher prices.
After peaking near $4,800, Ethereum retraced into a support zone between $4,200 and $4,350. Buyers are defending this level, suggesting that holding above $4,200 could lead to a bounce back to $4,400 and possibly higher resistance levels like $4,550 and $4,700.
However, the Relative Strength Index (RSI) briefly exceeded 70, a typical "overbought" territory, indicating the rally was fast and strong. Small pullbacks in mid-August are normal profit-taking rather than the end of the uptrend. Some reports note rising sell pressure and profit-taking around the $4,300–$4,400 range, potentially leading to a retest of the $4,000 psychological support level. Whether $4,000 holds is critical for sustaining the uptrend.
Looking ahead, leading forecasts from CoinDCX, Standard Chartered, and Fundstrat remain highly bullish, projecting targets well above $4,400, including $4,800 shortly and $7,500 or more by year-end. These projections are backed by institutional inflows, ETF demand, and regulatory support.
In terms of technical analysis, Fibonacci extensions outline $4,302 as the immediate upside and $4,886 as the next target if momentum holds. Netflow data shows outflows of $245.57 million on 10 August, adding to a pattern of sustained Ethereum withdrawals from exchanges.
It's important to note that the daily chart reveals that Ethereum is testing the $4,400 barrier, with support near $4,000. A failure to break these clusters might invite heavy selling and a pullback towards the $4,000-support level. The all-exchange Exchange Supply Ratio (ESR) has been steadily falling since 2022, reflecting reduced sell-side liquidity and stronger accumulation trends. Dense liquidation clusters between $4,300 and $4,400 have been identified on the liquidation heatmap, acting as potential price magnets.
In conclusion, Ethereum is likely to test and potentially break the $4,400 resistance if it holds current support zones and benefits from sustained buying pressure. However, short-term signs of exhaustion and profit-taking may trigger brief pullbacks or consolidation before a further rally. Monitoring price action around $4,200 support and volume trends will be key to assessing whether the bullish momentum continues or a deeper correction unfolds.
At press time, Ethereum is valued at $4,206.
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