Ethereum Eyes $4,000 as Bullish Momentum Builds

Last week, Ethereum has clearly been interacting with a resistance level at $3,454, following a small pullback earlier in the last week. According to CoinMarketCap, ETH declined by 2.63% on Tuesday, before finding support near the 61.8% Fibonacci level at $3,252, which is from the March high of $4,093 to the August low of $2,108.

The token is now trading around $3,600, after breaking out of the weekly resistance. This breakout above $3,454 could begin the climb for Ethereum to take its rally to 16%, and possibly reaching for the $4,000 round figure. This move is supported by the Relative Strength Index (RSI) on the daily chart, currently at 64, which means that there strong bullish momentum even in overbought conditions.

Bullish Scenarios: The Path to $4,000

This recent breakout is obviously a good sign and weekly close above $3,454 would confirm the bullish momentum and the continuation of Ethereum’s uptrend. Analysts believe that such a move could revive interest from lots of retail and even institutional investors, then trading volume and buying pressure will be all the better for it.

The market structure of Ethereum also shows sign of a possible rally. By breaking out from a bull flag pattern last week, ETH has continued to create higher lows, which is a sustained upward strength. If Ethereum closes the week advice $3,454, it could hit the $4,000 mark, which would be the second time this year since March. Aside $4,000, Ethereum’s next target is $4,200, which is another key level.

Bearish Scenarios: Risks of Rejection and Pullback

As always, Ethereum’s upward move faces risks. For a long time, $3,454 has been a strong barrier, and failure to close above it could mean a pullback. If ETH dips below $3,330, the next support levels is at $3,200 and $3,000, levels that could still be nice to buy from.

Traders are also careful of overbought conditions on shorter timeframes, which could lead to profit-taking. Then there's the macroeconomic factors, including regulatory developments and interest rate hikes, which could weigh on the market, stifling Ethereum’s rally.

Long-Term Outlook: Eyeing the Macro Picture

From its macro, Ethereum’s fundamentals are really strong. It is still dominating the decentralized finance (DeFi) sector, commanding over 50% of the market and bringing in $2 billion in every year. Plus, the launch of Ethereum-based spot ETFs has opened the doors for more inflows, which could boost long-term demand for ETH.

The upcoming altcoin season, which is in early 2025, could even increase Ethereum’s demand. Analysts are optimistic that ETH could record one of the strongest moves, visiting prices above previous highs. But this expectations are based on its ability to stay above $3,454.

Ethereum's performance around by the end of this week will determine it's short-term direction. Staying above resistance could push ETH toward $4,000 and even higher, while failure to hold above support might cause a retest of $3,000. Whichever way it goes, Ethereum remains one of the best crypto assets to watch this period.

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