Key Points:

• Ethereum struggled to surpass $4,800, leading to a 3% decline after a bearish trend.
• Selling pressure appears to be increasing, but leveraged investors remain engaged.
• A bounce back from the $4,400 mark could reinvigorate bullish trends towards new peaks.

On Monday, Bitcoin (BTC) reached a new all-time high, while Ether (ETH) found it difficult to breach the $4,800 threshold, eventually declining by 3% below $4,500 by Tuesday. This drop followed a bearish divergence observed on the four-hour chart, indicating potential weakness in buyer enthusiasm.

Ether bearish divergence analysis Source: Cointelegraph/TradingView

ETH tested the $4,500 threshold again, with mixed signals from on-chain and derivatives data. Despite a pronounced drop in spot cumulative volume delta (CVD), which signals increasing net selling pressure, futures market indicators remain high, suggesting leveraged investors are bracing for price volatility.

Ether price and market analysis Source: Coinalyze

Such market conditions could invite previously cautious traders looking for liquidity-driven opportunities rather than hasty trades. A potential liquidity push near $4,400, where stop-loss orders are likely concentrated, might trigger a brief market reset. A noteworthy rebound from this area would counteract the current bearish signal and lead to increased bullish momentum this week.

However, should ETH struggle to hold this crucial support level, a further decline could occur, potentially reaching $4,250 to $4,100, where significant buying interest might return.

Ether four-hour technical chart Source: Cointelegraph/TradingView

Note: This article does not contain any investment advice. All trading activities involve risks, and readers are encouraged to perform their own research prior to making decisions.

“Liquidity lag” for Ether may be closing

As per XWIN Research, the US M2 money supply has surged to an extraordinary $22.2 trillion. In contrast to Bitcoin’s impressive 130% increase since 2022, Ether has grown by just 15%, indicating a notable disparity in response to market liquidity.

Nonetheless, various on-chain indicators suggest that Ether could be making up ground. ETH exchange reserves have decreased to approximately 16.1 million, down over 25% since 2022, pointing to a steady reduction in selling momentum. Furthermore, net exchange flows remain negative, as ETH tends to move into self-management and staking, which could limit market availability.

Ether exchange reserves Source: CryptoQuant

Crypto trader Skew has observed that the recent upswing represents the “fourth interaction” with the $4,700-$4,800 range. If ETH is able to maintain this area, it would signify a positive outlook. On the contrary, any downturn could create a higher low, potentially paving the way for the next upward movement.

Additionally, for more insights, see the article: XRP records highest retail fear since Trump’s tariffs: Is a significant sell-off imminent?.