Ethereum News Today: Ethereum Eyes $4,400 Breakout as Long-Term Holder Selling Collapses

Ethereum is on the verge of a significant price movement as on-chain data reveals a sharp reduction in selling pressure from long-term holders. The cryptocurrency has formed a clean inverse head-and-shoulders pattern, with a potential breakout target near $4,400. Analysts are closely watching whether Ethereum can close above the $3,400 neckline, a key level that could signal the start of a bullish trend.

The recent on-chain activity shows a dramatic drop in selling from long-term holders. Since November 26, the number of ETH being sold by these holders has fallen by more than 95%, dropping from around 1.1 million to just 54,427 ETH by December 23. This sharp decline suggests that supply is drying up, which could make it easier for Ethereum to break through key resistance levels.

Cost basis data adds another layer of insight into Ethereum's potential price movement. The most significant resistance cluster lies between $3,150 and $3,173, where around 2.94 million ETH were last acquired. A sustained move above this zone would clear the path toward the $3,400 neckline and eventually the $4,400 target. The $3,150 level is particularly important as it aligns with key price chart levels, reinforcing its significance.

Why the Standoff Happened

Ethereum's current price action has been shaped by a combination of technical and on-chain factors. The inverse head-and-shoulders pattern is a classic reversal formation that has historically predicted strong price movements. In this case, the pattern is supported by a sharp reduction in selling pressure, which is unusual for this stage of a market cycle. Long-term holders are typically large sellers near key turning points, so their sudden withdrawal suggests that structural support is forming.

The cost basis data further explains why Ethereum is facing a critical decision point. The concentration of ETH accumulated between $3,150 and $3,173 creates a large supply wall. If Ethereum fails to break above this range, the price could stall or even retest lower support levels. However, if the price manages to clear this zone, the path toward $3,400 becomes more defined.

What Analysts Are Watching

Market analysts and traders are closely monitoring Ethereum's ability to overcome the $3,150–$3,173 resistance range. This level is a critical supply wall, and a sustained move above it would validate the bullish case for Ethereum. Analysts also highlight the importance of a clean close above $3,400, as this would confirm the breakout and trigger the measured move toward $4,400.

On-chain metrics remain a key focus for many analysts. The sharp drop in long-term holder selling is being interpreted as a sign of exhausted supply. This suggests that Ethereum's next move is more likely to be upward, provided that the breakout is confirmed. The combination of a strong technical pattern and supportive on-chain data creates a compelling case for a bullish outlook.

Risks to the Outlook

Despite the positive signals, risks remain for Ethereum's price action. If the price falls below $2,800, the structure of the inverse head-and-shoulders pattern weakens. A drop below $2,620 would fully invalidate the bullish setup and suggest that sellers have regained control. This would increase the likelihood of a deeper correction and could delay Ethereum's recovery.

Additionally, macroeconomic factors continue to influence the broader cryptocurrency market. Institutional selling pressure and macroeconomic tightening, such as the Bank of Japan's anticipated rate hike, add to the uncertainty. These factors can amplify Ethereum's volatility and create headwinds for a clean breakout.

What This Means for Investors

For investors, Ethereum's current setup presents both opportunities and risks. If the price successfully breaks above $3,150 and holds above $3,400, the target of $4,400 could become a realistic price level. This would represent a significant move and could attract more buying interest from both retail and institutional traders.

Conversely, if the price fails to break through the resistance zone, investors should be prepared for a potential retest of lower support levels. A drop below $2,800 would signal that the market is struggling to gain momentum, which could lead to further selling pressure and a deeper correction.

In the broader context, Ethereum's price movement reflects the evolving dynamics of the cryptocurrency market. Institutional interest, as seen in the ETF inflows, suggests that there is still demand for Ethereum despite the current volatility. However, this demand must be strong enough to counteract the selling pressure and support a sustained rally.