Ethereum (ETH) is showing signs of renewed strength as a rare combination of technical and fundamental factors suggests a significant breakout may be underway. After gaining over 6% on July 10, Ethereum is now trading near $2,612 and forming a bullish setup that could send the price soaring toward $4,000 in the coming weeks.
At the heart of this bullish scenario is a well-defined chart formation known as a bullish flag, often associated with continuation patterns in strong uptrends. This setup, visible on Ethereum’s daily chart, reflects a consolidation phase following a steep rally. Historically, such patterns often precede powerful upward moves when momentum returns.
According to technical analysis principles, the potential breakout target from a bullish flag is calculated by taking the height of the initial rally (the flagpole) and projecting it upward from the top of the consolidation. In Ethereum’s case, this points to a potential move to $4,015—just shy of the $4,080 highs reached in 2024.
Adding to the bullish case is the formation of a golden cross—a widely followed signal that occurs when the 50-day exponential moving average (EMA) crosses above the 200-day EMA. This crossover is often viewed as a strong confirmation of a long-term upward trend and suggests that bullish momentum is strengthening.
The narrowing gap between these moving averages over the past few weeks has indicated that a golden cross was imminent. Now that it has formed, many traders interpret this as the beginning of a new rally phase for Ethereum. Importantly, this technical alignment comes at a time when broader market sentiment around Ethereum is also improving due to rising institutional interest.
A major catalyst behind Ethereum’s recent surge is the strong inflow into spot ETH exchange-traded funds (ETFs). These products, which allow institutional investors to gain exposure to Ethereum without directly holding the asset, have attracted more than $4.5 billion in inflows across nine consecutive weeks—a record streak that highlights increasing confidence in the asset.
Total assets under management across all Ethereum ETFs have now surpassed $11 billion, reinforcing the growing narrative that ETH is solidifying its place as a core component in institutional portfolios. These developments are especially significant in light of Ethereum’s reduced circulating supply on exchanges, suggesting a tightening market that could further fuel upward price pressure.
Further supporting this narrative is the recent news of a blue-chip cryptocurrency ETF linked to Donald Trump’s digital asset initiative. This fund will allocate 80% of its capital to Bitcoin and Ethereum, with other high-cap altcoins like Solana and Cronos making up the remainder. This move is being interpreted as a vote of confidence in Ethereum’s long-term value and a potential driver of increased demand.
On the derivatives side, data from the futures market also paints a bullish picture. Open interest—representing the total value of outstanding contracts—has jumped to over $37 billion, its highest point since mid-June. That’s up significantly from last month’s low of $23 billion and suggests traders are positioning for further upside.
Despite all these positive signals, Ethereum is still facing important technical levels. To maintain its bullish trajectory, the price must hold above key support levels, particularly the recent monthly low of $2,125. A break below that threshold could invalidate the current setup and potentially push ETH back toward its year-to-date low of $1,390. As long as the price stays above $2,125 and consolidates within the bullish flag, the probability of a breakout remains intact.
In summary, Ethereum is in a strong position both technically and fundamentally. The formation of a golden cross and bullish flag pattern, combined with strong ETF inflows and rising open interest, suggest that the current price action may be the calm before a much larger move. If these trends continue, Ethereum could be well on its way to retesting the $4,000 level—possibly even sooner than many expect.
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