Here’s what’s next for ETH after being rejected at $4,000

Ethereum price is in a critical zone near $4,000, facing resistance but also showing signs of consolidation. While the market remains broadly bullish, short-term fluctuations within the $3.5K to $4K range are expected before a possible breakout or deeper pullback.

Technical Analysis

By Shayan

The daily chart

Ethereum has made impressive progress, rising towards the psychological resistance region of $4K. This price level coincides with Ethereum’s annual high and is a strong area of ​​selling pressure. Recently, the rejection along this line has caused a slight decline, indicating that the resistance is proving difficult for buyers to overcome.

After the correction, the market entered a period of low volatility, suggesting a short-term consolidation phase. This phase could last between $3,500 and $4,000 as buyers and sellers come to an equilibrium. The bearish divergence of the RSI indicator supports the notion of an overbought market, reinforcing the likelihood of this corrective stage.

Although the price has faced some resistance, ETH buyers will likely make another attempt to break above $4,000. However, before that, a period of sideways movement is expected as the market digests the recent gains.

The 4 hour chart

In the 4-hour period, ETH maintains a bullish market structure, consistently forming higher highs and higher lows. Despite the rejection of $4,000, the overall trend remains up as Ethereum has been trending within an ascending price channel.

The failure of the $4,000 resistance zone has led to a period of consolidation, with the asset sitting just below this critical level. The lower limit of the ascending channel, currently around $3.7K, provides near-term support. If the price continues to hold, a bullish move towards the $4,000 threshold is likely.

On the other hand, a break below the lower trendline of the channel could indicate a weakening of the bullish momentum, with a possible pullback towards the $3.5k support level in the medium term. However, if buyers manage to defend it, another attempt to break $4,000 could be imminent.

Onchain analysis

By Shayan

Ethereum’s funding rates metric, which reflects futures market sentiment, has risen to its highest level in months, coinciding with a major rally in prices. This highlights strong bullish sentiment, with traders anticipating new all-time highs. However, the market may require a correction to sustain this momentum.

Funding rates are at levels last seen in January 2024, when Ethereum rose 88%. This reflects increasing interest in long positions as optimism grows. Similar to January, this strong rise suggests the likelihood of a pullback, allowing the market to stabilize and avoid excessive volatility.

While Ethereum’s recovery is based on bullish sentiment, rising funding rates signal the need for a near-term correction, paving the way for healthier and more sustainable price growth.

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