Ethereum News Today: Ethereum tests $4K resistance as 10.8% CME Futures Open Interest surge and bullish hammer candle signal pivotal breakout

Ethereum faces a critical juncture as it approaches the $4,000 resistance level, with technical indicators and institutional positioning suggesting a pivotal moment for the cryptocurrency. At press time, ETH trades at $3,885.36, having tested the $3,925 threshold, which now acts as immediate resistance. Analysts highlight that a breakout above $4,000 could pave the way toward $6,000, while a rejection may trigger a pullback to $3,200–$3,500. The outcome of this test could define Ethereum’s trajectory for the remainder of the year.

A key technical signal supporting bullish sentiment is the formation of a monthly hammer candle, a pattern historically associated with price reversals. Crypto Patel, a prominent analyst, noted that such formations have preceded significant rallies in the past, with prior instances leading to gains ranging from 3x to 59x. The hammer’s appearance on May 4, coupled with rising trading volume, suggests growing buyer conviction. Ethereum is now exiting a multi-year accumulation phase, with investors who entered below $1,500 nearing threefold returns. However, Patel cautioned that a failure to hold above $3,831—a previous support level—could negate the bullish case and lead to a deeper correction.

Institutional activity further underscores the significance of this price level. Ethereum’s CME Futures Open Interest reached a record $7.85 billion, a 10.8% monthly increase driven by positions in 1–2 month and over 6-month contracts. This surge in open interest, as reported by CryptoQuant and analyst Maartunn, aligns with historical patterns where similar spikes preceeded strong upward moves. The data suggests large-scale traders are positioning for a potential breakout, reinforcing Ethereum’s technical strength above $2,800.

The cryptocurrency’s current price action also mirrors a classic cup and handle formation, a continuation pattern observed in prior bullish cycles. In 2021, Ethereum followed a similar structure, forming a rounded “cup” after a 300% rally, followed by a consolidation “handle” before surging past $4,000. For the pattern to hold, the current consolidation phase must maintain volume discipline—declining activity during the handle phase and a sharp increase upon breakout. While the cup’s depth and handle’s integrity remain under observation, a successful resolution could validate a move toward $6,000. Analysts emphasize that volume dynamics will be critical in confirming the pattern’s validity, as weak volume during a breakout may indicate shallow demand.

The psychological significance of the $4,000 level cannot be overstated. A confirmed breakout would not only solidify Ethereum’s bullish structure but also signal renewed institutional participation. Conversely, a rejection here could reignite bearish sentiment, particularly if macroeconomic conditions or regulatory developments introduce headwinds. Traders are advised to monitor key support levels, including the immediate $3,831 zone and the broader $3,200–$3,500 area, which could serve as a final line of defense for the asset’s long-term trend.

Ethereum’s path forward hinges on its ability to resolve the $4,000 test decisively. With technical indicators, institutional positioning, and historical patterns converging, the coming weeks will be critical in determining whether the cryptocurrency can sustain its upward momentum or face a significant correction.

Source: [1] [Understanding the Cup and Handle Pattern in Crypto Trading] (https://example.com/crypto-chart-patterns) [2] [Ethereum Eyes $6K as It Tests Crucial $4K Resistance Level] (https://coinmarketcap.com/community/articles/6887731a19d0ac2a2d639d41/)