Home Altcoins News Ethereum Eyes $4,361 as It Battles $3,200 Resistance

Ethereum Eyes $4,361 as It Battles $3,200 Resistance

Ethereum Eye

Ethereum (ETH) is gearing up for a potential breakout, with buyers pushing it toward the critical $3,200 resistance. Currently sitting at a market capitalization of $385 billion, Ethereum has witnessed a steady rise in price, increasing by 1.89% in the last 24 hours. This movement hints at the possibility of ETH breaking through the $3,200 resistance and heading towards $4,361, a key price target that could set the stage for a new bull cycle.

Ethereum ETF Flows and Institutional Interest

While Bitcoin (BTC) has seen a massive surge in institutional support, Ethereum’s ETF market is facing mixed flows. On January 29, U.S. Ethereum ETFs experienced net outflows of $4.82 million despite the Federal Reserve’s decision to keep interest rates steady. Grayscale’s Ethereum Trust (ETHE) sold $15.57 million worth of ETH, and Bitwise offloaded $4.05 million.

Despite these outflows, some institutional players are still actively involved in Ethereum. BlackRock and Fidelity have made notable purchases, adding $9.49 million and $4.49 million worth of ETH, respectively. This signals that while Ethereum ETFs are experiencing some resistance in attracting large-scale institutional capital, demand from key financial players remains steady.

Technical Analysis: Price Action and Key Levels

On the technical front, Ethereum’s price chart reveals that the asset is currently facing significant resistance near $3,200. The asset has recently shown a bullish reversal, with a 2.80% bullish engulfing candle forming on the 4-hour chart, signaling a potential upward move. Ethereum has also pushed past the middle line of the Bollinger Bands, indicating increasing momentum.

Despite this, Ethereum’s short-term future largely depends on breaking the immediate resistance around $3,271. The Fibonacci retracement levels show a key resistance at this level, which aligns with the 23.60% Fibonacci level. A break above $3,271 would clear the path for a potential move towards the next resistance at $4,071, followed by higher targets at $4,361 and $4,725.

Ethereum’s recent price action also reveals the asset’s ability to form a double-bottom reversal pattern, a classic technical indicator that signals bullish trend reversal. If Ethereum can continue pushing higher, this reversal could become the foundation for a broader rally, similar to its 2021 performance.

MVRV Ratio and Downside Risks

On-chain data, particularly the Market Value to Realized Value (MVRV) ratio, indicates a potential downside risk for Ethereum. The MVRV ratio has dipped below its 160-day moving average, a signal that Ethereum may be due for a correction. Historically, this scenario has led to significant price corrections, with Ethereum experiencing a 40% drop in price the last time this occurred, from $3,500 to $2,100.

While the MVRV indicator suggests some downside risk, it is essential to consider the broader market context. If institutional support for Ethereum re-establishes itself and the market continues its recovery, ETH could bounce back from any potential downside and push toward higher price levels.

Key Takeaways and Market Outlook

Ethereum’s path to $4,361 hinges on overcoming several hurdles, including the $3,200 resistance and the broader market dynamics. While recent price action suggests a potential breakout, technical indicators and on-chain metrics highlight both upside opportunities and downside risks. The next few weeks will be crucial in determining whether Ethereum can sustain its bullish momentum or face a potential correction.

For traders and investors, the key levels to monitor are $3,200 and $3,271, as breaking above these points could set the stage for a more aggressive rally. Conversely, if Ethereum fails to break through these levels, there may be a correction towards $3,000 or even lower. Ethereum’s ability to regain institutional support could provide the catalyst for further gains, making it an asset to watch closely as market conditions evolve.

Read more about:
Share on

James

James T, a passionate crypto journalist from South Africa, explores Litecoin, Dash, & Bitcoin intricacies. Loves sharing insights. Enjoy his work? Donate to support! Dash: XrD3ZdZAebm988BfHr1vqZZu6amSGuKR5F

Crypto newsletter

Get the latest Crypto & Blockchain News in your inbox.

By clicking Subscribe, you agree to our Privacy Policy.

Get the latest updates from our Telegram channel.

Telegram Icon Join Now ×