Ethereum News Today: Ethereum Trapped Near $4,000 as Onchain and Technical Signals Clash

Ether’s price action and onchain metrics reveal a complex and mixed outlook as the cryptocurrency remains range-bound near the $4,000 level. Data from onchain analytics firm Glassnode suggests that a sustained move above $4,500 could trigger a strong rally, as this level has historically acted as a price ceiling during previous bull cycles, including the 2020–2021 surge and the March 2024 high [1]. A clean breakout could lead to the liquidation of up to $930 million in short positions stacked just above $4,000, potentially fueling further upward momentum toward $4,500 [1].

The shift in market sentiment is also reflected in derivatives trading. Ether perpetual futures have surpassed Bitcoin in volume dominance for the first time since 2022, marking the largest recorded shift in trading focus toward Ethereum [1]. This trend aligns with the revised stance of pseudonymous trader Byzantine General, who now believes that Ethereum is too strong to see a meaningful short-term pullback [1]. The trader’s revised outlook underscores the growing conviction among market participants that Ethereum could be entering a new phase of strength.

Despite these bullish signals, technical indicators raise caution. A bearish divergence in the RSI on both four-hour and daily timeframes suggests that buyers may be showing signs of exhaustion [1]. This pattern has historically coincided with local tops, and a failure to break through $4,000 with strong volume could result in a short-term correction. Immediate support is currently seen near $3,700, where a narrow fair value gap (FVG) is observed [1]. Should bearish pressure persist, Ethereum could retest its long-term FVG between $3,200 and $3,300, potentially leading to a bearish break of structure.

The interplay between onchain momentum and technical caution highlights the fragile balance in Ethereum’s near-term outlook. While the volume and liquidation dynamics favor a breakout above $4,000, the bearish divergence warns of potential volatility if the move lacks conviction. Traders are advised to closely monitor price behavior and volume confirmation around key levels before committing to long positions [1].

Source: [1] ETH chart divergence flashes warning while onchain metric predicts rally to $4.5K (https://cointelegraph.com/news/eth-chart-divergence-flashes-warning-while-onchain-metric-predicts-dollar4-5k)