Ethereum’s price has hit a roadblock at the psychological $4,000 level, causing analysts to predict that the cryptocurrency may remain range-bound in the near term. According to pseudonymous crypto analyst Rekt Capital, Ethereum is facing strong resistance around the $4,000 mark, which it has struggled to maintain in recent weeks. Despite briefly climbing above this level, reaching a high of $4,077 on December 6, ETH has been unable to hold its ground above $4,000, as evidenced by data from CoinMarketCap.
In his December 20 market report, Rekt Capital highlighted that $3,000 has now become a key psychological support level for Ethereum, having previously marked a significant price point on November 9. Before that, Ethereum had been trading below $3,000 for much of the summer.
Rekt Capital speculates that Ethereum may continue to consolidate within the range of $3,000 to $4,000 in the near term. However, he also noted the possibility of a short-term dip of more than 10%, bringing Ethereum closer to the $3,000 support level again. According to Rekt, this dip could set the stage for the development of an inverse head-and-shoulders pattern, which is typically seen as a bullish reversal formation, signaling the potential for upward momentum in the longer term.
Several factors support the notion that Ethereum’s price could stabilize within this range, including on-chain data suggesting a tightening of supply. As reported by market intelligence firm CryptoQuant, Ethereum balances on exchanges recently hit an 8.5-year low of 9.2 million ETH, marking a nearly 10% decrease over the past year. This trend indicates that more ETH is being held in private wallets, reducing the circulating supply on exchanges and potentially increasing scarcity.
This tightening of supply could serve as a catalyst for a future price increase, especially if demand for Ethereum-related products, like spot Ether exchange-traded funds (ETFs), continues to grow.
Another positive development for Ethereum is the increasing momentum of spot Ether ETFs, which have already amassed approximately $2.43 billion in investments since launching in the U.S. on July 23. Despite a slower start compared to Bitcoin ETFs, analysts are optimistic that the inflows into these Ethereum ETFs will continue to increase, especially if regulators allow these funds to generate yields from staking.
VanEck, an asset management firm, has forecasted that Ethereum’s spot price could hit $6,000 by the fourth quarter of 2025, driven by the growing interest in spot Ether ETFs. This optimistic outlook suggests that if the uptrend in Ethereum ETFs continues, Ethereum could potentially experience strong price momentum moving into 2025.
When Ethereum ETFs were first launched, there was widespread hope that Ethereum would mirror Bitcoin’s performance after the launch of spot Bitcoin ETFs in January 2023. However, the initial inflows for Ethereum ETFs have been weaker than expected, leading some analysts to adjust their price targets for ETH in the short term. The initial expectation that Ethereum would reach $5,000 by the end of 2024 now seems unlikely, given the slower-than-anticipated ETF inflows and overall market conditions.
Still, the long-term outlook for Ethereum remains positive, especially as more institutional and retail investors gain exposure to ETH through ETFs. As the market matures, there is potential for more significant price moves, particularly if Ethereum’s fundamentals continue to strengthen.
Ethereum’s price is currently caught between two key psychological levels—$3,000 and $4,000. While the short-term outlook may see continued consolidation within this range, analysts are watching closely for a potential breakout or reversal pattern, such as the inverse head-and-shoulders formation.
Ethereum’s on-chain data, including low exchange balances and growing interest in spot Ether ETFs, suggests that there could be significant upside potential in the longer term. However, with a cautious near-term outlook, the market is likely to remain range-bound until stronger catalysts—such as sustained ETF inflows or a breakout above the $4,000 resistance—emerge. For now, Ethereum investors may need to be patient as the market digests the current conditions and prepares for potential future gains.
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