Ethereum Targets $4,000 Breakout as the Crypto Market Recovers

As Bitcoin pushes above the $105,000 resistance, Ethereum is gradually making a comeback. Over the past 24 hours, Ethereum’s price has increased by 1.89%

As the crypto market recovers from a bearish January, major coins are presenting varied price actions. While Bitcoin showcases a gradual rise, slowly crossing the $105,000 resistance, Ethereum seems to be lagging behind. Despite a slight price increase, institutional support for the second-largest crypto is waning.

According to ETF Flows data from Finbold on January 29, U.S. spot Bitcoin ETFs recorded $92 million in inflows. However, in an interesting turn of events, despite the FOMC’s decision to keep federal rates steady, U.S. Ethereum ETFs saw an outflow of $4.82 million.

Grayscale’s mini Ethereum trust and Bitwise both recorded net outflows. Grayscale’s ETHE sold $15.57 million worth of Ethereum, while Bitwise offloaded $4.05 million.

On the other hand, BlackRock and Fidelity bought $9.49 million and $4.49 million worth of Ethereum, respectively. Other Ethereum ETFs reported no significant changes in flow.

Meanwhile, Ethereum’s price action on the 4-hour price chart shows a persistent struggle to gain bullish momentum. Recently, Ethereum’s price dropped to $3,000 for the fourth time in the past 30 days. However, following a double-bottom reversal and a broader market recovery, Ethereum presents significant upside potential.

With a 2.80% bullish engulfing candle, Ethereum is currently trading at $3,200, forming a Doji candle on the 4-hour chart.

Technical indicators on the 4-hourの時間枠 show a potential buying opportunity as Ethereum faces crucial psychological resistance. A short-term reversal, coupled with the bullish engulfing candle, has pushed Ethereum past the midline of the Bollinger Bands.

With the upper Bollinger Band declining, the short-term reversal points to a potential breakout. Additionally, the True Strength Index (TSI) shows a positive crossover, increasing the chances of a bullish rally.

The Fibonacci retracement levels highlight a key resistance at $3,271, which aligns with the 23.60% Fibonacci level. Together with the local resistance trendline, Ethereum faces multiple resistance levels at this juncture.

However, with the broader market recovering, Ethereum could follow a trajectory similar to its 2021 bull run. A breakout above the resistance trendline could propel Ethereum to the $4,071 resistance.

Moreover, Fibonacci levels suggest upcoming price targets at $4,361 and $4,725. On the downside, the $3,000 psychological mark remains resilient and will likely absorb potential surprise supply waves.

In other news, on-chain data for Ethereum signals a potential correction ahead, despite the broader market recovery. In a recent post on Twitter, Ali Martinez highlights how Ethereum’s MVRV could indicate a potential downside of up to 40%.

“#Ethereum $ETH MVRV has dropped below the 160-day MA once again. The last time this happened was on June 23, 2024, which led to a 40% price correction from $3,500 to $2,100,” Martinez’s post reads.

However, with market conditions shifting, a rebound is possible if institutional support resurfaces and the broader market continues to recover.