Ethereum's Price Rollercoaster: Bullish Divergence Points to $4,000

Ethereum's price has been on a rollercoaster ride in recent weeks, with a brief bullish breakout followed by a sharp decline due to a significant ETH token drain from the ByBit exchange. Despite the setback, on-chain data suggests that Ethereum's price could still reach $4,000 before the end of the current cycle.

An analyst on the CryptoQuant platform, known as Crypto Sunmoon, identified a bullish divergence in Ethereum's taker buy/sell ratio across all exchanges. This metric measures the taker buy and taker sell volumes for Ethereum, and when the ratio is greater than one, it indicates a higher willingness of investors to pay a higher price for the asset, signaling a bullish sentiment.

The analyst noted that the 100-day exponential moving average (EMA) of Ethereum's taker buy/sell ratio has been rising in recent weeks, while the Ethereum price has been declining since mid-December. This divergence suggests that a bearish trend has ended and an upward trend could be starting. Historically, this bullish divergence has preceded a significant price rally, with Ethereum's price climbing from beneath $2,500 to above $4,000 (over 60% rally).

As of this writing, Ethereum's price stands around $2,650, reflecting a nearly 4% decline in the past 24 hours. While investors may view a reclaim of $3,000 as a victory, history and this bullish divergence suggest that Ethereum's price could still climb toward the $4,000 mark before the end of the current cycle.