Ethereum News Today: Ethereum's Rise Pits Investor Psychology Against Historic Price Barriers

Ethereum’s price has surged past $4,900, marking a new all-time high and entering a phase of price discovery. As of the latest data, ether (ETH) reached an intraday high of $4,946.90 on Sunday, surpassing its previous peak of $4,867 from November 2021. This move reflects growing demand and a shift in market momentum, with analysts noting that ether is outpacing bitcoin in relative strength. The five-year price chart from TradingView shows a clean breakout, with no prior historical resistance levels to impede further gains. This trend suggests that the market is now relying on order flow and investor psychology rather than established technical levels to determine the price trajectory [1].

The leadership shift in the crypto space has been highlighted by several analysts. Miles Deutsher, for instance, observed that “BTC is exhausted, ETH isn’t,” a commentary on the contrasting momentum of the two largest cryptocurrencies. Bitcoin has shown signs of stalling near recent highs, while ether continues to push into uncharted territory. This dynamic often leads traders to rotate into assets that exhibit stronger relative strength, with ether currently showing more follow-through in its price action and active buying at dips [1].

Another key factor driving the ETH price is the declining supply on exchanges. Exchange reserves, which refer to coins held in wallets controlled by centralized trading platforms, have been trending downward. This indicates that fewer coins are available for immediate sale, increasing the pressure on buyers to push prices higher to incentivize sellers to offload their holdings. Analyst Crypto Rover emphasized this dynamic, describing it as a “supply shock” scenario. While not a guarantee of continued price increases, it does create a setup where scarcity can amplify price movements once momentum is established [1].

However, some analysts caution that the recent ETH breakout may face a short-term pullback. Michaël van de Poppe pointed out that the unusually large weekly candlestick suggests a potential retracement as liquidity returns to the market following the weekend. In crypto trading, weekends typically see thinner order books, allowing larger price swings. When trading resumes in full force, especially on Monday, prices often retest breakout levels to confirm support before continuing their trend. This means that a pullback toward the $4,900 zone would not necessarily invalidate the broader bullish case for ether [1].

Beyond price action, there is growing geopolitical interest in Ethereum’s infrastructure. The European Union is reportedly considering public blockchains like Ethereum and Solana for its digital euro project, according to a report by the Financial Times. This move comes in response to the growing influence of U.S.-backed stablecoins following the passage of the Genius Act, a law that facilitates the issuance of dollar-pegged tokens by major corporations. EU officials are evaluating whether to deploy the digital euro on a public or private blockchain, with the former offering greater interoperability but also introducing concerns around government oversight and privacy [2].

The ECB has not yet finalized the technical framework for the digital euro, but the shift in focus toward public blockchains signals a strategic reevaluation. Some officials argue that a public blockchain-based digital euro could better align with the decentralized nature of modern financial infrastructure. However, critics have raised concerns about potential government surveillance, even as the ECB insists that personal data will remain with commercial banks and not be directly accessible by the central bank [2].

Ethereum’s recent price performance and its role in global financial policy discussions underscore its growing significance beyond speculative trading. As institutional interest in blockchain-based solutions expands, the ecosystem surrounding ether continues to evolve, with both technical and geopolitical factors playing a crucial role in shaping its future trajectory [3].

Source:

[1] As ETH Breaks Above USD4,900, Analyst Sums Up Crypto Market (https://www.coindesk.com/markets/2025/08/24/as-eth-breaks-above-usd4-900-analyst-sums-up-crypto-market-btc-is-exhausted-eth-isn-t)

[2] EU Considers Public Blockchains for Digital Euro (https://finance.yahoo.com/news/eu-considers-public-blockchains-digital-211540508.html)

[3] Europe Mulls Ethereum, Solana for Digital Euro Launch (https://cointelegraph.com/news/europe-mulls-ethereum-solana-digital-euro-launch)