Ethereum Price Approaches $4,000 Psychological Level – What’s Next?

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Ethereum continues to surge strongly, with its price now reaching a 7-month high of $3,745. Over the past week, this Altcoin has surged 27%, with investors actively accumulating ETH, driving its strong momentum.
Despite showing strong growth signs, this rapid growth pace is pushing Ethereum towards a saturation point that could determine its next move.

Ethereum Investors Accumulate Heavily

Since early July, the Ethereum balance on exchanges has decreased by over 317,000 ETH. This amount is worth over $1.18 billion, reflecting massive investor withdrawals and reducing available supply. The price drop indicates strong market confidence that prices will continue to rise.
As demand exceeds supply, this accumulation trend is driving ETH upward. Such an aggressive trend suggests many market participants believe ETH might soon break through $4,000, which would bring more bullish pressure to its price movement.
Ethereum Exchange Balance. Source: glassnode
Ethereum's Network Value to Realized Value (NUPL) ratio is currently approaching the "Belief-Denial" zone. This indicator can show whether investors are profitable and help identify potential reversal areas. Historically, whenever NUPL enters this zone, Ethereum's price experiences a short-term adjustment.
The Belief-Denial level typically acts as a saturation point where optimistic investors start taking profits. If Ethereum breaks through $4,000, this psychological level could trigger massive selling pressure. This pattern has repeated over the past 16 months and may recur if ETH's bull run continues without correction.

ETH Price May Not Surge Significantly

At the time of writing, Ethereum is trading at $3,745, just 6.8% away from the $4,000 mark. This level was a strong psychological resistance in previous bull markets. The current rebound momentum puts ETH in a solid position to test this resistance in the coming days.
However, if the market enters a profit-taking phase, Ethereum might fail to break $4,000. This pullback could drive the price down to $3,530. Losing this support could expand the decline to $3,131, erasing recent gains and confirming the start of a short-term reversal.
ETH Price Analysis. Source: TradingView
On the other hand, if accumulation continues to dominate, Ethereum's bearish outlook might become invalid. Breaking $4,000 would support a continuing upward trend, enabling ETH to set new highs.
This scenario largely depends on the strength of investor confidence and broader market cues.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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