Ethereum Price Targets $4,000 Breaking Key Resistance Levels

Ethereum (ETH) price traded at around $2,380 after going past critical resistance. That suggests it could climb to $3,000 and $4,000.

The sharp upmove started after the Federal Open Market Committee’s decision to hold interest rates steady on May 7. Ethereum price has cleared critical levels, and on-chain metrics are flashing bullish signals. So, the stage is set for a significant upside move.

Ethereum Price Broke Key $1,860 Resistance

According to Ali Martinez, Ethereum price recently broke above the $1,860 resistance. It is a critical zone where 4.54 million wallets hold 5.58 million ETH.

The top altcoin has finally broken out of an important supply wall. It had been capping its progress for the past few weeks, marking a massive change in market sentiment.

As the price has rebounded above this level and is now holding strong, Ethereum could rally for the long term with potential goals for $3,000 and $4,000.

Additionally, crypto analyst IncomeSharks highlighted that ETH price has also cleared its second diagonal resistance. It confirmed a broader trend reversal. The chart showed ETH moving steadily higher after multiple buy signals along the lower trendline.

With the next major resistance zones at $3,000 and $4,000, traders are eyeing a potential multi-month rally if the current momentum holds.

Bullish Divergence and On-Chain Data Support ETH’s Rally

Notably, Javon Marks noted a major bullish divergence in the price chart for Ethereum. It is a classic reversal pattern signaling forthcoming major price recovery.

According to Javon’s analysis, ETH had a double bottom with momentum indicators, such as the Relative Strength Index (RSI) starting to rise, indicating a bullish divergence.

This technical arrangement is usually a sign of a new trend commencing with price targets much higher than the current price.

Meanwhile, on-chain data also supported this bullish outlook. At the time of writing, Ethereum’s open interest soared by 2.65% to about $21.35 billion over the past 24 hours as $400 million worth of new capital jumped into ETH futures.

The rise in open interest meant traders were positioning for a larger move. The technical analysts pointed to $3,000 and $4,000 as possible targets.

Derivatives Market Signals Strong Bullish Sentiment

The derivatives market also reflected a strong bullish bias for Ethereum. Binance’s ETH/USDT long/short ratio stood at 2.1486, while OKX traders showed an even more aggressive stance with a ratio of 2.26.

Those figures indicated more than twice as many traders are long versus short. That also indicated a strong belief in further upside.

For top traders on Binance, ratios of long/short positions have risen to 2.8153, indicating increased confidence in Ethereum’s upward slide. It is consistent with market sentiment, as traders set up for further upside.

The long exposure and the increase in open interest suggest that the market is anticipating a significant price move in the coming weeks.

Moreover, liquidation data also supported this bullish trend. ETH shorts at press time accounted for $14.33M in long liquidations and $6.07M in ETH short liquidations. It showed that Ethereum traders who were betting against a price recovery have been squeezed out.

Ethereum Price Eyes $4,000 as Key Levels to Watch

When writing, Ethereum price was trading around $2,399 as it recently overcame a major resistance line at $1950. The top altcoin’s ongoing bullish action could serve as a confirmation of the next leg higher to $3,000 and $4,000.

However, Ethereum price is expected to continue its recent momentum to avoid a pullback towards the $1,860 support zone, which has now flipped from resistance.

In the near term, with the Fed’s rate pause as the catalyst, this might just be the beginning of Ethereum’s recovery. As technical indicators improve and market sentiment turns bullish, the outlook for the altcoin strengthens, suggesting a potential breakout in the coming months.