Ethereum (ETH) is at a critical juncture as it tests the $4,000 resistance level, with $930 million in short positions at risk of liquidation. Will this trigger a massive breakout or a sharp pullback? Here’s what traders need to know.
Ethereum News: Key Resistance at $4K
ETH has been consolidating below $4,000 since December 2025, but on-chain data suggests a breakout could be imminent. The +1σ active realized price band near $4,500 has historically acted as a ceiling. A clean move above $4,000 could propel ETH toward this level.
ETH Price and Liquidation Risks
Liquidation heatmaps reveal $930 million in short positions clustered just above $4,000. A breakout could trigger a cascade of liquidations, fueling rapid upward momentum. Key points:
- Short liquidations could accelerate buying pressure.
- ETH perpetual futures volume has surpassed Bitcoin for the first time since 2022.
- Traders like Byzantine General are bullish, calling ETH “too strong.”
Ethereum Breakout or Pullback?
Despite bullish signals, technical indicators show caution:
- Bearish RSI divergence on 4-hour and daily charts.
- Support levels at $3,700 and $3,200–$3,300 if a pullback occurs.
- Low breakout volume could lead to a short-term correction.
Conclusion: Prepare for Volatility
Ethereum’s next move hinges on the $4,000 resistance. A breakout could spark a rally toward $4,500, while failure may trigger a dip to key support zones. Traders should stay alert.
FAQs
Q: What happens if Ethereum breaks $4,000?
A: A breakout could liquidate $930M in shorts, potentially driving ETH toward $4,500.
Q: Why is there bearish RSI divergence?
A: Price highs aren’t confirmed by RSI strength, signaling potential buyer exhaustion.
Q: Where is ETH’s key support?
A: Immediate support lies at $3,700, with stronger backing at $3,200–$3,300.
Q: Is ETH outperforming Bitcoin?
A: Yes, ETH perpetual futures volume recently surpassed BTC’s for the first time since 2022.
