Ethereum Eyes $5,000 Breakout, but Exchange Flows and Shorts Cloud the Path

Key Points

• Ethereum targets $5,018 after a breakout from a bull pennant formation on the daily chart.
• ETF inflows and record-high transactions point to rising institutional and network demand.
• Binance outflows and high short ratios introduce headwinds near the $4,000 resistance zone.

Ethereum has broken above a multi-week bull pennant pattern, setting a technical target near $5,018 on the daily timeframe. 

The breakout follows a sustained upward move and now sees support from rising transaction volumes. On-chain data shows Ethereum transactions hit a one-year peak, exceeding 1.8 million daily.

Increased Layer-2 activity and restaking demand continue to drive network throughput. According to Etherscan data, successful transactions dominate, with failed interactions remaining consistently low. 

These conditions highlight improving scalability and strong user participation across protocols built on Ethereum.

Simultaneously, institutional interest is rising. Ethereum ETFs registered a daily inflow of 4,116 ETH, totaling $15.87 million, according to Lookonchain. BlackRock’s iShares Ethereum Trust led with 9,077 ETH added, positioning it as the top contributor in the segment.

Heavy Shorting and Exchange Activity Pressure Resistance Levels

Despite bullish momentum, Ethereum faces growing resistance near the $4,000 mark due to market structure and trader positioning. 

Coinglass reports nearly equal long and short volumes, with a market-wide long/short ratio split close to 50/50. This balance suggests indecision among traders at current levels.

At the same time, exchange data tracked by Spotonchain shows large volumes of ETH and SOL being moved from Binance to market-making entities. 

Transfers totaling millions of dollars raise concerns of potential near-term selling pressure. These movements align with Ethereum’s repeated failure to hold above $4,000 in recent sessions.

Market sentiment is mixed. While altcoin market cap has flipped resistance into support, helping broader upside potential, trader behavior remains cautious. 

Analyst TedPillows highlighted that if ETH clears $4,000, altcoins could rally strongly, though this hinges on volume and reduced exchange-led selling.

With shorts accumulating and technical momentum building, Ethereum’s breakout path remains in focus. 

However, success now depends on absorbing selling pressure while maintaining on-chain and institutional support in the coming days.