Ethereum Price Prediction: ETH Approaches the $4000 Mark, But Profit Pullback Risks Are Imminent

Ethereum (ETH) has recently surged to a 7-month high, but the price has yet to break through the psychological barrier of $4,000. Altcoins have shown remarkable growth momentum, but overcoming this significant hurdle may be challenging. Investors are closely following, as Ethereum's next move could determine its future price direction.

Ethereum is witnessing the market top

Currently, 94% of the total supply of Ethereum is in profit. Historically, when the percentage of profitable supply exceeds 95%, it indicates that the market is reaching its peak. Subsequently, as investors begin to take profits, a price pullback occurs. Therefore, if this trend continues, the price of Ethereum may experience a correction, potentially reversing the recent upward momentum.

Market peaks usually indicate that bullish momentum has been saturated, and many investors begin to sell off their holdings. This shift may slow down Ethereum's upward momentum as the market reacts to potential saturation.

(Source: Santiment)

The macro trend of Ethereum has mixed feelings, with new address activities becoming the focus. At the beginning of this month, the number of new addresses surged but then plummeted sharply. However, recent data shows that in the past 10 days, the number of new addresses increased by 13%, from 119,184 to 135,532.

If the growth of new addresses continues, it may offset the impact of the market reaching its peak, providing support for Ethereum and sustaining its price increase. The entry of new investors may enhance the demand for Ethereum, thereby reducing the risk of market pullbacks.

(Source: Glassnode)

ETH price needs to push

ETH is currently priced at $3,872, maintaining above the local support level of $3,742. Although ETH is approaching the $4,000 mark, it has not yet broken through. This resistance level may continue to exist, thereby limiting Ethereum's short-term upside potential.

If the market peak indicates a reversal, Ethereum's price could drop to $3,530 or even lower. Additionally, Ether may also significantly fall to $3,131, wiping out most of the gains from the past month. Such a trend would render the bullish sentiment driving Ethereum's rise ineffective.

On the other hand, if the influx of new addresses continues and strengthens, Ethereum may eventually break through the resistance level of $4,000. If this happens, ETH could rise to $4,425 and experience another price surge. This would overturn the bearish argument and push Ethereum into a new bullish phase.

(Source: Trading View)