Ethereum's Critical Price Battle at $4,060: A Strategic Inflection Point for Long-Term Bullish Momentum

Ethereum (ETH) has entered a pivotal phase in its price trajectory, with the $4,060 level emerging as a critical battleground for bulls and bears. Over the past week, the cryptocurrency has struggled to reclaim this key support/resistance threshold, raising questions about whether this is a temporary consolidation or the precursor to a deeper correction. For long-term investors, the outcome of this price battle could determine whether Ethereum resumes its bullish momentum or faces renewed bearish pressure.

Technical Analysis: A Fragile Equilibrium

From a technical perspective, Ethereum's inability to hold above $4,060 has left the market in a precarious position. Analysts like Ted and Andrew Crypto have emphasized that a sustained break below this level could trigger a fresh leg down toward $3,600, a historically significant support zoneEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. Conversely, a successful retest of $4,060 could act as a catalyst for a rally toward $4,260–$4,280, with longer-term targets at $4,700 and even $5,000 if the uptrend resumesEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1].

Key resistance levels, such as $4,680, remain untested, and failure to break above this threshold could reignite downward pressureEthereum Price Uptrend To Continue? These Factors Could Send ETH To $4,300 –^[4]. On the 4-hour chart, Ethereum is currently trading near a $3,700–$3,850 support band, with the daily RSI hovering near oversold levels at 31, suggesting potential for a short-term reboundEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. However, the price remains below its 200-period SMA at $4,416, reinforcing a bearish medium-term biasEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1].

On-Chain Investor Sentiment: Profit-Taking to Loss-Selling

On-chain metrics paint a mixed picture of investor sentiment. The Spent Output Profit Ratio (SOPR) has fallen below 1.0, indicating that a significant portion of Ethereum transactions are occurring at breakeven or at a lossEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. This shift from profit-taking to loss-selling underscores the growing bearish pressure in the market.

Active Ethereum addresses have also declined sharply, dropping from over 500,000 to approximately 370,000, mirroring the price decline and signaling fading network activityEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. Meanwhile, Ethereum ETF outflows have accelerated, with $796 million in outflows recorded over five consecutive daysEthereum slides 20% – So why did whales just bet $1B on a rebound –^[2]. This exodus of institutional capital has further exacerbated downward momentum, particularly as large investors like Grayscale and BlackRock have offloaded significant ETH holdingsETH’s Downward Spiral: How Low Can Ethereum Price Actually Go –^[3].

Yet, amid the bearish backdrop, signs of accumulation are emerging. A single whale opened a $1 billion long position on Kraken, while Ethereum's trading volume surged to $40.5 billion—surpassing Bitcoin—fueling speculation about a potential Q4 reboundEthereum slides 20% – So why did whales just bet $1B on a rebound –^[2]. These signals suggest that while short-term selling persists, some market participants are positioning for a reversal.

Institutional Activity: A Double-Edged Sword

Institutional activity has played a decisive role in Ethereum's recent trajectory. ETF outflows have exceeded $76 million in 24 hours, with BlackRock alone selling $15.1 million in ETHEthereum slides 20% – So why did whales just bet $1B on a rebound –^[2]. Exchange-held supply has also reached a nine-year low, compounding liquidity concernsETH’s Downward Spiral: How Low Can Ethereum Price Actually Go –^[3]. However, reduced institutional demand has coincided with increased whale activity, creating a tug-of-war between bearish and bullish forces.

Strategic Implications for Long-Term Investors

For long-term investors, the coming days will be critical in determining Ethereum's path forward. If Ethereum stabilizes above key supports and shows signs of retesting $4,060 successfully, it could signal a resumption of bullish momentum. Analysts like Michaël van de Poppe have highlighted that current price action aligns with a higher timeframe support test, suggesting potential for accumulationEthereum slides 20% – So why did whales just bet $1B on a rebound –^[2].

Conversely, a breakdown below $4,060 could open the door to $2,930, near the 200-day SMAEthereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. This scenario would likely deepen the drawdown from all-time highs, which has already reached -22%Ethereum (ETH) Price Analysis: Analyst Predicts an ETH Rally –^[1]. Given the interplay of technical and on-chain signals, patience and risk management will be essential for investors navigating this inflection point.

Conclusion

Ethereum's battle at $4,060 represents a strategic inflection point with far-reaching implications for its long-term trajectory. While technical indicators and on-chain data highlight the risks of further declines, signs of accumulation and historical parallels to 2017 and 2020 suggest that a rebound remains possible. For now, the market remains in a delicate balance, with the outcome hinging on whether bulls can reclaim $4,060 or face a deeper correction.