Ethereum Struggles to Break $4,000—What’s Really Holding It Back?

Ethereum (ETH) has been struggling with the $4,000 price level for months now. Since March 2024, it’s been rejected at this point three times. Right now, it’s sitting at $3,475, and while that’s a slight improvement, ETH has still dropped 24% over the past few days—from $4,087 to $3,097. Even with a small bounce back, things aren’t looking great overall. So, why is Ethereum struggling so much lately?

Why Can’t Ethereum Break the $4,000 Wall?

$4,000 is like a brick wall for Ethereum. Every time it gets close, the price just falls back down. Recently, ETH dropped to $3,097, but it’s managed to bounce back a bit to $3,475. Still, things don’t look too promising. The trading volume is down by nearly 15%, showing that traders aren’t too excited right now. The relative strength index (RSI) is sitting at 52.64, meaning the market is neutral, but not much movement is happening. While the 20-day moving average is helping to keep ETH above $3,400, breaking through $4,000 remains a challenge.

ETFs Aren’t Helping Ethereum’s Case

When Ethereum launched its spot ETFs in August, there were high hopes for them. Unfortunately, they haven’t really had the impact people were expecting. The U.S. spot ETH ETFs currently hold about $11.98 billion, which is tiny compared to Bitcoin’s $109.66 billion in ETFs. Just yesterday, $60 million left the ETH ETFs, which is the biggest outflow since mid-November. On top of that, social sentiment around Ethereum is at its lowest in a year. But here’s the thing—sometimes these kinds of lows are actually a sign that ETH could see a bounce back soon.

Futures and Foundation Sell-Offs Add to the Drama

Things don’t look too great in the futures market either. Ethereum futures are showing a negative premium for the first time since early November. That’s a worrying sign for many traders. Then, there was a huge sell-off yesterday, with $299 million in liquidations happening all at once. It was the biggest sell-off since December 9. Adding fuel to the fire, the Ethereum Foundation sold 100 ETH on December 17. These kinds of sell-offs near local highs have raised some serious concerns.

What’s Next for Ethereum?

So, what can we expect moving forward? On the bright side, ETH has bounced back by about 12% from its recent low, so there could be a short-term recovery on the way. But analysts are split. Some think that sentiment could turn positive and push ETH higher, while others are worried about issues like the high supply of ETH and the fact that many investors are leaning towards Bitcoin instead.

Ethereum’s future remains uncertain, but as always, this market is full of surprises.