Ethereum Tests Critical Support Level as $4,000 Target Emerges

In the midst of recent market corrections, Ethereum (ETH) has revisited a crucial multi-year support level, suggesting a potential rebound to $4,000. Nonetheless, some analysts caution that ETH has touched a significant level against Bitcoin, indicating that celebration might be premature.

The crypto market experienced its largest decline in months just over a week ago, pushing Bitcoin and several other cryptocurrencies to their lowest points in a month. Ethereum's value dropped to $2,120, its lowest since the early August correction. Subsequently, ETH has fluctuated between $2,600 and $2,830, yet it has struggled to establish the upper end of this range as a support throughout the past week.

The latest downturn, apparently triggered by Donald Trump's new tariffs on steel and aluminum, caused Ethereum to dip below the $2,600 mark, a significant resistance before breaking out in Q3 2024. On Monday, Ethereum regained this recently lost support by trading above $2,650 throughout the morning. Observers note that ETH remains at its critical multi-year support.

Having been in an upwards trend since 2022, Ethereum has tested this trendline four times previously. Each retest has resulted in a rebound to a significant horizontal level shortly after. In 2022, ETH encountered resistance between $1,900 and $2,200 during its trendline retests before eventual breakthroughs. Comparatively, the rebounds in 2023 and 2024 saw ETH moving from uptrend support to retest resistance at the $4,000-$4,100 levels. Market observer and investor Ted Pillows mentioned that Ethereum has maintained its upward support since May 2023 after the recent retest, potentially indicating an imminent rebound. If this pattern persists, ETH may surpass the $4,100 resistance and pursue new highs.

Ted Pillows also remarked that ETH's latest "capitulation candle" bore similarity to March 2020's events.

Back then, a significant drop led investors to believe the altcoin's rally was concluded, only for the cryptocurrency to rebound, marking a "long-term structure breakout for Ethereum." Analyst Crypto Jelle notes that ETH presently trades within a multi-year ascending triangle, with recent performance suggesting the next movement could be substantial.

He highlighted that Ethereum's upcoming attempt could mark the fourth retest of the $4,000 mark this cycle, potentially overcoming this resistance level as it diminishes. Successfully surpassing this key resistance may lead to reapproaching the $4,878 all-time high.

Furthermore, Daan Crypto Trades highlighted that the ETH/BTC trading pair has reverted to its 2016-2020 levels, ranging between 0.023-0.036. Historically, the upper zone of this range acted as a pivotal resistance, once transformed to support, it propelled ETH to ATH and local highs against BTC. The trader believes ETH/BTC may remain here "for quite some time," suggesting excitement should build once it confidently surpasses 0.036.

Currently, Ethereum is trading at $2,659, marking a 1.2% daily increase.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.