Ethereum at a Critical Point: Can Technical Support Hold the $4000 Level

Currently, Ethereum’s price hovers around $2,994, with a 33% upside potential to reach $4,000. But what truly attracts attention is not this number itself, but a “critical moment” the market is experiencing — signals from both technical and fundamental perspectives are emerging simultaneously, one indicating an upward possibility, the other exerting downward pressure. The outcome of this tug-of-war could determine Ethereum’s next trajectory.

Long-term Technical Signals

Analyst Don points out that Ethereum is in a multi-year contracting wedge pattern, with prices compressed between a descending resistance line and an ascending support line. What are the characteristics of this pattern? The longer the compression, the greater the potential move once a breakout occurs.

Support line is holding

The key observation now is that the ascending support line has successfully held multiple pullbacks, forming higher lows. What does this indicate? Long-term buyers are steadily accumulating, and there is no obvious distribution (large holders selling off) in the market.

Shorter-term charts also confirm this. The daily chart’s upward trend line has repeatedly provided a buffer. After recent pullbacks, ETH found support in this area and rebounded mildly, suggesting buyers prefer to accumulate on dips rather than follow the trend to sell. This lays a foundation for a potential breakout — if technical support continues to hold, Ethereum’s price could challenge the $4,000 mark at the end of the compression.

Fundamental Pressure Signals

But optimism from technicals must be balanced with fundamental realities. According to the latest news, Ethereum ETFs recently experienced about $230 million in net outflows in a single day, with institutional giant BlackRock contributing over $90 million. What does this mean?

Institutional adjustments often impose short-term constraints on price, especially when approaching key resistance levels. This doesn’t mean institutions are bearish on Ethereum, but rather that when prices near important thresholds, they tend to take profits. It’s a normal risk management behavior.

Multifaceted fund flows

Interestingly, fund flows are not one-sided. Recent data shows that the related address of Bhutan’s sovereign wealth fund, Druk Holdings, is leveraging Aave to long ETH with a current leverage position of about 117,000 ETH, worth approximately $459 million. This indicates that long-term institutional funds are still actively positioning in Ethereum.

Current Key Variables

This is the current market situation:

The key is the battle between these two forces. If technical support continues to hold and selling pressure is gradually absorbed, Ethereum’s price could break out. Conversely, if the critical trend line is lost, a pullback could reopen.

Two Possible Future Scenarios

Based on current information, the market may face two directions:

Bullish Scenario: Technical support remains intact, long-term buyers continue to accumulate, institutional net outflows are just short-term profit-taking, and the price gradually moves down to the cost basis, eventually launching an attack on $4,000 or higher at the end of the compression. This aligns with the technical logic of the long-term wedge pattern.

Bearish Scenario: If the key trend line is broken, institutional selling accelerates, market sentiment shifts, and a pullback space reopens. However, given current data, this scenario seems less likely because support lines are still holding.

Summary

Ethereum is currently at a genuine “critical juncture.” The technical outlook suggests an upward possibility, with the long-term wedge pattern and multiple support confirmations pointing toward a breakout opportunity. But the fundamental pressure — partial institutional selling — cannot be ignored.

This is not a simple bullish or bearish situation but a crucial moment to closely observe whether support can hold and whether capital flows will reverse. For investors, the key is to maintain composure, assess whether support lines are truly functioning, and not be misled by short-term volatility. The market’s answer will come soon.