Ethereum (ETH) is at a pivotal moment as it approaches the $4,000 resistance level, with $930 million in short positions at risk of liquidation. Will ETH break through or face a pullback? Here’s what traders need to know.
Ethereum News: ETH’s Bullish Momentum Faces Key Test
Ether (ETH) has been consolidating below the $4,000 resistance since December 2025, but recent on-chain data and derivatives activity suggest a potential breakout. Key metrics to watch:
- +1σ Active Realized Price Band: Currently near $4,500, this level has historically acted as a ceiling. A breakout could trigger strong upward momentum.
- Short Liquidation Cluster: Over $930 million in short positions could be liquidated if ETH breaks above $4,000, fueling a rapid price surge.
- Derivatives Dominance: ETH perpetual futures have surpassed Bitcoin in trading volume for the first time since 2022, signaling heightened trader interest.
ETH Price: Technical Indicators Flash Warning Signs
While the bullish case is strong, technical indicators suggest caution:
- Bearish RSI Divergence: The Relative Strength Index (RSI) shows weakening momentum on both 4-hour and daily charts, hinting at buyer exhaustion.
- Support Levels: Immediate support lies at $3,700, with a long-term fair value gap between $3,200 and $3,300 if bearish pressure intensifies.
$4K Resistance: A Make-or-Break Moment for Ethereum
The $4,000 level is critical for ETH’s next move. A clean breakout could propel prices toward $4,500, while rejection may trigger a short-term pullback. Traders should monitor:
- On-chain liquidation heatmaps.
- Volume confirmation on breakout attempts.
- Derivative market sentiment shifts.
Conclusion: Prepare for Volatility
Ethereum’s near-term trajectory hinges on the $4,000 resistance. While bullish momentum is strong, technical risks remain. Traders should stay agile and watch for breakout or rejection signals.
Frequently Asked Questions (FAQs)
- What happens if Ethereum breaks $4,000?
A breakout could trigger $930M in short liquidations, potentially fueling a rally toward $4,500. - Why is RSI divergence concerning?
It suggests weakening buying pressure despite higher prices, often preceding pullbacks. - How significant is ETH’s derivatives volume?
Surpassing Bitcoin in futures volume signals strong trader interest and potential volatility. - Where is ETH’s key support?
$3,700 is immediate support, with $3,200-$3,300 as a critical long-term zone.
