Ethereum Price to Reach $4,000, but Market Top Suggests Delay

Ethereum (ETH) has recently surged to a 7-month high, yet the cryptocurrency has yet to breach the psychological $4,000 level. 

The altcoin has shown impressive growth, but overcoming this significant barrier may prove challenging. As investors watch closely, ETH’s next moves could determine the future price direction.

Ethereum is Noting A Market Top

Currently, 94% of Ethereum’s total supply is in profit. Historically, when the profitable supply surpasses 95%, it signals a market top. This has been followed by price corrections as investors begin to secure profits. As a result, Ethereum’s price could face a pullback if the trend continues, potentially reversing recent gains.

Market tops often indicate that bullish momentum has saturated, and many investors begin to sell their holdings. This shift could slow Ethereum’s upward movement, as the market reacts to potential saturation.

Ethereum’s macro momentum has seen a mixed trend, with new address activity being a focal point. Earlier this month, the number of new addresses spiked but then sharply declined. However, recent data shows a 13% increase in new addresses over the last 10 days, rising from 119,184 to 135,532.

If this growth in new addresses continues, it could counter the impact of the market top, providing Ethereum with support to sustain its price gains. New investors could help strengthen the demand for Ethereum, reducing the risk of a market pullback.

ETH Price Needs A Push

Ethereum’s current price stands at $3,872, holding above its local support level of $3,742. While ETH is approaching the $4,000 mark, it has not yet managed to breach it. This resistance could continue to hold, limiting Ethereum’s immediate potential for further gains.

If the market top signals a reversal, Ethereum’s price could drop to $3,530 or lower. A sharp decline to $3,131 is also a possibility, erasing much of the recent gains made in the past month. Such a move would invalidate the bullish sentiment that has driven Ethereum’s growth.

On the other hand, if the influx of new addresses continues and strengthens, Ethereum may finally break through the $4,000 resistance. Should this happen, ETH could rise towards $4,425, with a renewed surge in price. This would invalidate the bearish thesis and push Ethereum into a new bullish phase.