Ethereum requires increased activity to reach $4,000 mark

Ethereum (CRYPTO:ETH) is facing significant challenges in regaining investor confidence and reclaiming its previous all-time high of $4,000.

The cryptocurrency has been in a downtrend for nearly six weeks, having fallen below this psychological threshold on December 16, 2024.

Analysts emphasise that to reverse this trend, Ethereum needs to enhance its blockchain activity and develop new use cases.

Aurelie Barthere, a principal research analyst at Nansen, noted that other layer-1 platforms are gaining traction in terms of applications, fees, and staking amounts.

Barthere suggests that collaboration with both public and private sectors could significantly boost Ethereum's adoption, especially given recent regulatory movements favoring blockchain technology.

One potential avenue for increased adoption could come from the Department of Government Efficiency (DOGE), led by Elon Musk.

This non-governmental organisation is reportedly exploring blockchain-based solutions for expense tracking and financial management.

“Musk’s DOGE has met with public blockchain representatives for potential on-chain expense tracking,” Barthere mentioned, indicating a possible partnership that could enhance Ethereum's visibility and utility.

Additionally, Joseph Lubin, co-founder of Ethereum and founder of Consensys, hinted that the Trump family might be considering ventures involving Ethereum-based cryptocurrencies.

Such high-profile interest could further promote Ethereum's adoption among investors.

While Ether options trading volume has surged recently—indicating some recovery in the market—Ethereum faces significant resistance at the $3,400 mark.

Analysts believe that if Ether can reclaim this level, it could trigger over $1 billion in leveraged short liquidations, potentially fueling a price rebound.

“ETH is forming a bullish divergence on the daily timeframe.[...] To continue the uptrend, ETH needs a 1D close above $3,400, and the rally towards $4,000 will happen very soon,” Crypto trader Cas Abbé noted, suggesting optimism for a potential upward movement if the resistance is overcome.

At the time of reporting, the Ethereum (ETH) price was $2,788.00.