Key Points:
Ethereum is in a liquidity battle zone between the support at $3,900 and resistance at $4,400.
Record inflows into ETFs reached 649,000 ETH, indicating sustained institutional demand.
The long-term outlook remains bullish, with a dip to $3,000 to $3,500 seen as a consolidation phase before a surge to $8,000.
Ethereum (ETH) is entering a critical trading week after recording its highest weekly closing price in four years, currently trading within two significant liquidity ranges, with price fluctuations exceeding 11%.
On the downside, ETH hit a low of $4,224 on Monday, with market focus on $4,150, a support range formed by multiple liquidity lows. There is a reasonable price gap around $4,000, overlapping with the 0.50–0.618 Fibonacci retracement range from $4,100 to $3,900, making this area highly attractive for swing traders.
The trading platform Kiyotaka noted that this area is "a large cluster of buy orders stacked down to $3,900," becoming an important zone for liquidity, stop-loss triggers, and potential reversals.
On the upside, Ethereum faces an immediate liquidity cluster near $4,400, formed during the Monday low, which may act as a short-term magnet before a potential pullback. A sustained bullish reaction at this level could push ETH towards $4,583, a resistance level on a higher time frame.
Confirming a breakout and stabilizing above this level would strengthen the likelihood of setting a new all-time high in the coming days, continuing the multi-week bullish momentum for the asset.
Additionally, from a structural perspective, a deeper retest of $3,900 may be more favorable for bulls, aiding in the adjustment of long positions and accumulating liquidity for a subsequent rebound towards $4,500 and new all-time highs, a trend that may persist into the fourth quarter.
Meanwhile, the four-hour Relative Strength Index (RSI) remains below 50, indicating that ETH still has room to move downward and has not yet entered the oversold zone, leaving space for a potential upward breakout.
Despite the intense liquidity fluctuations in the short term, Ethereum's overall outlook remains strongly bullish, bolstered by record net inflows and favorable technical trends.
Last week, the net inflow into U.S.-listed spot Ethereum ETFs reached nearly 649,000 ETH, marking the largest single-week net inflow in history. It briefly rose to $4,740 before pulling back over the weekend, but the strong inflow momentum indicates deep institutional demand.
Market analysts are also more optimistic about Ethereum's market position compared to Bitcoin. Bloomberg's senior ETF analyst Eric Balchunas stated that with the launch of Ethereum ETFs, Bitcoin became the "second choice" crypto asset in July, while Ethereum ETFs have been rated as the ETF of the month due to high investor interest.
Technically, traders believe Ethereum has formed a multi-year bullish flag pattern and is gradually approaching a breakout point.
Renowned trader Merlijn noted that institutional funds have been consistently buying during each pullback, while the previous consolidation phase has eliminated weak holders.
In the long term, ETH is expected to dip to the $3,000–$3,500 range, followed by a potential breakthrough of the $8,000 mark, which could open a new chapter in Ethereum's price history.
Related: Is the bottom for Bitcoin (BTC) at $114,700? Data suggests the reversal timing is here.
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