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- Ethereum struggles at key resistance levels, with bearish divergence and dwindling open interest hindering its journey toward the $4,000 milestone.
- Historical Q1 strength and potential whale activity may revive bullish momentum, but $3,500 support is critical for avoiding further losses.
Ethereum’s price is currently stuck in a battle around critical resistance levels, leaving analysts and investors speculating whether it can hit $4,000 before February. Despite Bitcoin surpassing the $100,000 mark recently, Ethereum remains subdued, trading at $3,240, marking a 9.60% drop in the past 24 hours.
Ethereum’s relatively stagnant performance could be tied to dwindling interest among participants. Data from CoinGlass highlights a 9.70% decline in open interest in just the last 3 days, even as Ethereum manages to notch higher highs. Analysts suggest this divergence may point to shorts being closed but not enough new long positions opening, limiting bullish momentum.
Adding to the puzzle, Ethereum’s liquidation heatmap reveals significant resistance around $3,700 and $4,100. On the flip side, $3,100 and $3,200 remains a critical support level. These markers could guide ETH price action in the coming weeks, particularly if bullish momentum resurfaces.
Ethereum’s Q1 Brilliance — Will History Repeat?
Ethereum’s slow start to January contrasts with its historical strength in the first quarter of each year. Data from Coinglass shows that Q1 has been Ether’s best-performing quarter, boasting an average gain of 82%. January and March typically shine brightest, with average returns of 21% and 22%, respectively, according to Cryptorank.
This strong seasonal trend could bolster hopes for Ethereum’s price recovery. However, the current bearish divergence in technical indicators, like the Relative Strength Index (RSI), is currently sitting at 36, slightly above the oversold condition. As Ethereum’s price climbs higher, the RSI’s lower highs may forecast a potential correction or at least a short-term pause in the rally.
Market participants are keeping an eye on broader conditions, including Bitcoin’s performance, whale activity, and shifts in open interest. For Ethereum to break through $4,000, these elements must align, creating a supportive backdrop for sustained upward momentum.
A Bullish Bounce or Bearish Breakdown?
The road to $4,000 in February isn’t without its hurdles. A dip below $3,500 could indicate weakening bullish sentiment, opening the door to further losses. Broader economic factors, like regulatory developments and global market trends, also loom large over Ethereum’s near-term outlook.
If the bearish divergence unfolds fully, selling pressure could push Ethereum into a demand zone ranging from $3,430 to $3,470. For long-term investors, that dip might represent a chance to accumulate ETH at a discount. A subsequent bounce could see ETH recovering past $3,600, potentially setting up a higher high and igniting a fresh uptrend.
Should Ethereum gain traction again, price targets of $3,840 and $4,050 could come into play. However, without a significant uptick in bullish momentum or increased interest from whales, the climb to $4,000 remains unconfirmed but not impossible.
