Ethereum’s latest rally has paused below a critical resistance zone as the market faces a pivotal test. After reaching $4,800 earlier this week, Ether (ETH) saw a quick 3% pullback to around $4,450, setting up a make-or-break moment for bulls hoping to push the second-largest cryptocurrency toward new all-time highs.
Ethereum Faces Resistance at $4,800
While Bitcoin surged to fresh record levels above $126,000, Ethereum struggled to clear the $4,800 resistance, triggering a short-term correction. The decline was accompanied by a bearish divergence on the four-hour chart, signaling waning buying strength and a possible local top.
ETH briefly tested the $4,500 support zone, where mixed signals emerged from both on-chain and derivatives data. The spot cumulative volume delta (CVD) dropped sharply — a sign of net selling pressure from short-term traders — while futures open interest remained elevated.
This combination suggests that leveraged traders are still active, positioning for upcoming volatility even as spot investors lock in profits.
Traders Watch for Liquidity Sweep Near $4,400
Market analysts believe Ether’s next move may depend on how it reacts near the $4,400 liquidity zone, an area where stop orders have likely accumulated. A liquidity sweep in this region — followed by a strong rebound — could reset bullish momentum and confirm a short-term bottom.
If ETH holds this zone and recovers, the rally could resume toward $4,800–$5,000, opening the door for new highs in Q4.
However, if ETH fails to maintain support above $4,400, the correction could deepen toward $4,250–$4,100. These price levels coincide with key order blocks identified on the four-hour and daily charts — historically strong zones for institutional demand and potential reversals.
“Liquidity Lag” Between Bitcoin and Ethereum Narrows
According to XWIN Research, the U.S. M2 money supply — a measure of total liquidity — has risen to a record $22.2 trillion. Bitcoin has already gained over 130% since 2022 in response to this liquidity wave, while Ethereum’s growth has been a more modest 15%, indicating what analysts call a “liquidity lag.”
However, that gap may be closing. On-chain data shows that Ethereum’s exchange reserves have dropped to 16.1 million ETH, a 25% decline since 2022. This trend reflects ongoing outflows from centralized exchanges as investors move ETH into staking and self-custody wallets.
Negative net exchange flows continue to suggest reduced sell-side pressure — a bullish signal for long-term holders.
Analysts Still Expect a Bullish Reversal
Crypto trader Skew noted that this week’s move marked the fourth test of the $4,700–$4,800 resistance area. “If ETH manages to hold this region, that would be pretty bullish,” he said.
Analysts also point to a broader macro backdrop that may support a recovery. With global liquidity expanding and risk assets rebounding, Ethereum could benefit from renewed institutional demand — particularly from funds that have been steadily increasing ETH exposure through ETFs and staking platforms.
Meanwhile, technical analysts believe that even if Ethereum experiences a deeper pullback, forming a higher low could strengthen the longer-term uptrend. Historically, such consolidations have preceded major upside moves during previous bull markets.
The Road Ahead: A Pivotal Week for ETH
Ethereum’s recent price action reflects a classic mid-cycle setup — a temporary pause following strong gains. As long as the network maintains key support levels and exchange outflows persist, the broader trend remains favorable.
The $4,400–$4,800 range will likely determine Ethereum’s next major move. A decisive breakout above resistance could open the path toward $5,200–$5,500, while failure to hold support could send prices briefly lower before the next leg up.
With Bitcoin maintaining record highs and liquidity metrics turning more favorable, many analysts believe Ether’s best performance of 2025 may still be ahead.
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