Ethereum: Profitability Halts Potential Growth – Will Ethereum See $4,000?

Futures trading for Ethereum has increased by 40% as traders position themselves for potential price changes.

• Despite increased outflows from exchanges, profit-taking by investors is limiting major increases for Ethereum.

The price of Ethereum [ETH] is experiencing a period of volatility, with fluctuating highs and lows in recent weeks.

After a brief drop below $2,600, Ethereum showed signs of recovery and was trading at $2,645.52 at the time of publication.

In the last 24 hours, the price has risen by 0.29%, while it saw a slight decline of 0.12% last week. Ethereum’s market capitalization was $318.46 billion, with a 24-hour trading volume of over $17.88 billion.

Key Technical Levels to Watch

Ethereum’s price is close to a critical support level at $2,181.30. This level is reinforced by an ascending trendline that has supported the crypto since mid-2022.

If Ethereum drops below this support, the market may experience a downward trend that could potentially lead to further price declines.

On the other hand, Ethereum faces resistance around $2,926. A breakout above this resistance could push the price higher with a potential target of $3,540.

If buying momentum strengthens, the price could even test previous highs around $4,000.

For bullish investors, the ascending trendline will play a crucial role in maintaining market confidence.

Increased Futures Trading Amid Volatility

The MACD indicator for Ethereum showed a bearish sentiment, with both the MACD line and the signal line below zero.

However, if the MACD histogram begins to show positive momentum, it could indicate a reversal and support a more bullish scenario for Ethereum in the coming weeks.

Recent futures trading data from Coinglass indicated increased activity in the Ethereum market. Open interest in ETH futures has risen by 2.94%, currently reaching $12.66 billion, indicating growing trader interest.

Additionally, the volume of ETH futures surged by 40.39% to $25.63 billion, while options volume increased by 258.39% to $564.17 million.

These increases signal heightened participation in Ethereum futures, suggesting market participants are positioning themselves for potential price changes.

Profit-Taking, Not Accumulation

An assessment by AMBCrypto indicated that since late July, outflows of Ethereum from centralized exchanges have increased, suggesting some investors are accumulating.

However, this accumulation was not as significant as seen in February or November 2023. Over the past two weeks, net flows have shown several positive days, indicating that some holders are taking profits.

While the volume of these outflows is not large enough to signify an exodus, it reflects a portion of the market that is cashing in on recent price increases.

Netflow data indicates that while some accumulation exists, it may not be sufficient to create a significant bullish rally for Ethereum in the short term.

Instead, profit-taking appears to be the dominant behavior as some holders have been investing in Ethereum’s performance since March 2024.