Ethereum (ETH) Breaks Key Resistance Levels, Market Eyes $4,000 as Next Target

Ethereum (ETH), the second-largest cryptocurrency after Bitcoin, has experienced significant gains lately, even as other digital assets

World's second-largest cryptocurrency, Ethereum (ETH), has seen remarkable gains lately, even as other digital assets pull back from the recent market rally.

According to data from CoinMarketCap, ETH is currently trading at $3,635, up 5% and 10% over the past day and week, respectively.

This trend, which coincides with Donald Trump's victory in the U.S. presidential election, has highlighted a growing appetite for risk assets and Ethereum's potential to break through key resistance levels. As the price continues to rise, the next critical level to watch is $4,000, given the current bullish technical indicators and strong fundamentals.

Among the key factors boosting ETH are leveraged ETF products, which have reportedly seen a substantial rise in demand since early November. According to Cointelegraph, the demand for the VolatilityShares 2x Ether ETF has surged by 160% since November 5.

ETF Boom, U.S. Election Aftermath

In the three weeks since the election, investor confidence in risk assets such as Ethereum has surged, partly due to expectations of a more favorable regulatory climate. While Bitcoin has led the charge with new all-time high prices, Ethereum's price has been steadily climbing, positioning it as a strong-performing cryptocurrency in the coming months.

Ethereum Weekly Chart, Source: CoinMarketCap

From a low of $3,260 on Tuesday, Ethereum made a move up to $3,685 on Thursday, showing gains of 13% in just two days of trading activity. Looking at the monthly chart, ETH's gains are even more substantial. The token has surged by 37%, with technical indicators such as the Relative Strength Index (RSI) and moving averages suggesting strong bullish momentum.

This optimism is further fueled by the network's dominant role in decentralized finance (DeFi), where it commands over half of the total value locked across all platforms. According to data from DefiLlama, Ether has nearly $70 billion in total value locked (TLV), although this figure is down from more than $100 billion in 2021.

Ethereum Total Value Locked, Source: DefiLlama

On the fundamentals front, Ethereum continues to see rising on-chain activity, new wallet creation, and increasing revenue. Layer-2 scaling solutions are also attracting developers and users, enhancing the network's scalability and competitiveness.

Bitcoin Impact

As Bitcoin struggles to break past the $100,000 mark, Ethereum could be making a move on the down-low. According to analysts, Bitcoin's range-bound trading may be surreptitiously diverting investor attention and funds towards Ethereum, pushing its price higher.

Moreover, Ethereum ETFs have seen consistent inflows, with $90 million being added recently, according to data from Farside Investors. In the DeFi space, Lido, Aave, and EigenLayer collectively hold a significant portion of this value. Additionally, stablecoin activity on Ethereum has surpassed Tron, with $60.3 billion in USDT now hosted on the Ethereum network, according to Coindesk.

The broader market sentiment around Ethereum has also benefited from Trump's pro-crypto campaign promises. His administration has signaled a reduction in regulatory hurdles, sparking hopes of a DeFi resurgence in the U.S.