Can ETH Clear $4K Resistance After Gaining 10% Weekly?

ethereum has been showing strong bullish momentum, with a recent surge pushing the price towards the crucial $4K resistance region.

As it approaches this important resistance, there is potential for further gains, although short-term corrective consolidations are likely due to overbought conditions.

Technical analysis

By shayan

The daily chart

After successfully reclaiming the $3.5K resistance level, ethereum has continued its uptrend, reaching the important $4K resistance region. This price range coincides with eth's yearly high and is crucial as it has acted as a strong resistance in previous attempts. This price range is likely to contain substantial selling pressure, which may prevent the asset from rising in the near term.

However, a break above this level would indicate the continuation of the uptrend and potentially lead to a new all-time high. Considering the overbought state of the market and the strong impulsive move, a period of consolidation is expected within the $3,500 to $4,000 range before any new bullish move. The RSI indicator also confirms this scenario, as the overbought conditions highlight a possible consolidation or correction stage soon.

The 4 hour chart

On the 4-hour chart, eth price continues to make higher highs and higher lows, confirming the prevailing bullish trend. However, the RSI is showing a bearish divergence, indicating a loss of bullish momentum. This could lead to a short-term pullback or consolidation, especially near the $4,000 resistance region.

As ethereum tests the $4K resistance, the possibility of a temporary rejection becomes high. A retest of the $3,500 support level, where buying pressure has been strong in the past, is likely. If eth finds support at this level, it could lead to another attempt to break the $4K resistance.

Chain analysis

By shayan

Examining ethereum futures market metrics provides valuable insights into market sentiment, complementing price analysis. A key metric to focus on is the Taker Buy Sell Ratio, which reveals how aggressive buyers are versus sellers in executing their orders.

As shown in the chart, as ethereum price approaches the important resistance level of $4,000, a notable increase in market sell orders is seen. This increase in sell orders has pushed the buyer's bid-ask rate to its lowest point in several months.

This change suggests that future market participants can lock in profits or prepare for a possible price correction. The drop in the Taker Buy Sell index implies a possible slowdown in the bullish price movement as more market participants adopt a risk-averse approach. This aligns with the anticipation of a price pullback or correction phase, making it crucial for traders to monitor the futures market for new developments.

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