Ethereum Aims For $4,500: Can It Steer Clear Of $2,100 Tumble?

• Market analyst Ted Pillows sees Ethereum entering a short-term expansion phase.
• Trump’s World Liberty Financial (WLFI) continues aggressive ETH accumulation.
• Ethereum has faced key resistance at $3,344, potentially dropping to $2,100.

Ethereum (ETH) has entered an expansion phase, with analysts predicting a surge past $4,000. However, key resistance at $3,344 and bearish indicators raise concerns about a potential drop to $2,100.

Ethereum’s Price Surge and Key Resistance Levels

Market analyst Ted Pillows said the ETH price has entered a short-term expansion phase. The analyst highlighted that Ethereum has broken out of an accumulation phase between $3,100 and $3,250. The price manipulation briefly pushed it down to $3,080.

His projections indicated that ETH could surpass $4,000 in the coming days and potentially rally to $4,500 by February. Pillows linked this bullish momentum to continued Ethereum purchases by U.S. President Donald Trump’s financial entity, World Liberty Financial (WLFI).

WLFI has accumulated over $388 million in digital assets, including $204 Million of Ethereum. On inauguration day, the entity acquired $47 Million in ETH, continuing with $10 Million in daily purchases. This persistent buying pressure has stabilized ETH’s price and fueled market confidence.

Can ETH Break Above $3,344?

Market analyst Karan Singh Arora pointed to a crucial resistance level at $3,344, marking it as the “flip-to-pump” zone. If Ethereum closes above this level daily, it may face resistance around $3,800 before rising to $4,000 or higher.

However, failure to clear this level could result in a price retracement. Singh Arora warned that the ETH price could drop to the $2,980–$2,810 support range. There, strong buying interest is expected to re-emerge.

Bullish Divergence and Falling Wedge Pattern

Ethereum, in analyst Cas Abbe’s opinion, is one of the most underappreciated crypto assets. This is in spite of Trump’s aggressive ETH acquisitions and the launch of spot ETH ETFs. ETH was still 35% below its peak, indicating a long-term bull market.

Cas Abbe identified a bullish divergence and a falling wedge pattern on Ethereum’s daily chart. Historically, these patterns signal an upward reversal. The breakout point for this wedge is $3,200, with an initial upside target of $3,600 and a longer advance to $4,000-$4,500.

Ethereum’s Derivatives Market Indicates Short-Term Risks

Despite the bullish momentum, the Ethereum derivatives data suggests interim downside risks. CryptoQuant trader TraderOasis observed that Ethereum’s open interest is rising.

This further signaled fresh position-building. However, the funding rate remains negative, indicating that many traders are shorting ETH.

This bearish sentiment and increased open interest suggest a potential price squeeze. A liquidity gap exists between $2,900 and $3,100, a range with minimal trading activity.

If ETH dips into this zone, it could trigger forced liquidations of short sellers. This could also lead to a rapid price recovery toward key resistance levels.

MVRV Momentum Signals Potential Correction to $2,100

Despite ETH’s bullish outlook, analyst Ali Martinez pointed to a declining Market Value to Realized Value (MVRV) ratio. It is a historical warning sign of corrections. The MVRV ratio recently dropped below the 160-day moving average, a level that previously preceded a 40% price decline.

The last occurrence of this pattern in June 2023 saw Ethereum plunge from $3,500 to $2,100. Martinez cautioned that if ETH fails to maintain support, it could retrace to the $2,230–$2,610 support zone. There, over 11.99 million wallets hold 62.27 million ETH.

Can Ethereum Rally to $10,000?

In contrast to bearish indicators, analyst Ted Pillows remains optimistic. He suggested that Ethereum is forming higher lows on longer timeframes, supporting a move beyond $4,000.

Pillows projected that the ETH may reclaim $4,000. If this happens, it could push toward a new all-time high of $9,000–$10,000 within three to four months.

The analyst also pointed to continued ETH accumulation by Trump’s WLFI, reinforcing the bullish outlook. CoinGape reported that WLFI acquired $71.5 Million worth of ETH following Trump’s inauguration, with additional purchases expected.

Ethereum’s expansion phase is in motion, but the asset faces strong resistance levels that could dictate its next move. If ETH clears $3,344, a breakout toward $4,000–$4,500 is likely.

However, failing to breach this resistance could lead to a correction toward $2,100–$2,600. It could further align with bearish MVRV signals.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.