Ethereum encountering $4K hurdle reminiscent of 2020 levels: Is $6K on the horizon?
Within the last day as per the latest data, 13 whales with significant holdings of over 10000 ETH each, have fortified the Ethereum [ETH] network.
In parallel, World Liberty Fund acquired 3247 ETH valued at $10M, expanding their total assets to $189M, signaling a trend of accumulating assets.
This spree of acquisitions highlights a strong belief in the value proposition of ETH despite the ongoing challenges in its price performance.
The growing number of major holders potentially stabilizes the ETH price by decreasing market fluctuations and boosting the asset’s scarcity.
This aspect is crucial as ETH has demonstrated a downward trend, with the price oscillating around $3,190.27, registering a modest uptick of 3.29% within a day.
Among other assets in the World Liberty Fund’s portfolio, WBTC showed a slight increase of 0.32%, while TRON (TRX) experienced a rise of 1.6%. Conversely, AAVE saw a decline of 0.94%, priced at $301.89.
The involvement of WLFi not only impacts the ETH market but also suggests a potential price floor if the accumulation trends persist.
This strategic accumulation pattern could shield ETH against further downtrends, indicating an optimistic outlook for the crypto sector if the pattern continues.
Increasing Open Interest
The Open Interest of Ethereum has been on a steady rise since August 2024, closely following Ethereum’s price movements in the long run.
By the end of 2024, both indicators surged, with Open Interest peaking at about 21 billion by January 2025.
During this phase, Ethereum’s price displayed a volatile yet upward trajectory, climbing from roughly $2,500 in early 2024 to highs approaching $4000 by the end of the year.
The recent uptick in Open Interest signifies that despite the current price decline, there is significant trading activity that could drive Ethereum’s price upward once more.
Considering the historical correlation, the rising Open Interest might lead to a rally if Ethereum can stabilize and rebound from its current levels around $3,350.
ETH could potentially witness a swift return to previous highs or even surpass them, reaching new milestones.
ETH mirroring Q4 of 2020
The current scenario of Ethereum closely resembles the situation in Q4 of 2020. During that period, despite the surge in Bitcoin’s value and the DeFi hype, Ethereum struggled to surpass resistance levels, much like the existing barrier at $4K.
Previously, each push of Ethereum faced substantial resistance around $400, a scenario reminiscent of the current challenge at the $4,000 mark.
Upon successfully surpassing the $400 hurdle, Ethereum initiated a powerful rally, climbing nearly 150% to exceed $1,000 within two months.
Presently, Ethereum is grappling with a comparable pattern. The current trend demonstrates repeated endeavors to breach the $4K level, encountering familiar rejections as in the past.
If Ethereum manages to maintain a close above $4K, historical patterns suggest a potential swift rise to $5,000 and potentially $6,000 within the next six to eight weeks.
This projection relies on Ethereum breaking through these critical resistance levels, which could spark another substantial price surge, echoing the explosive movements witnessed in late 2020.