Recently, every Sunday night has been marked by market movements, and last night was no exception. The market was driven by ETH, with its price rising directly from $3,500 to over $3,800 over the weekend, while other Altcoins also saw significant gains. Bitcoin remained at around $118,000, and the Bitcoin dominance index BTC.D continued to decline, nearly falling below 61%, indicating that funds are shifting from previously favoring Bitcoin to entering the Altcoin market.
VX: TZ7971
Investors are bullish on ETH mainly due to several positive news last week. SharpLink Gaming (SBET) significantly increased its financing from $1 billion to $6 billion, with buying ETH as reserves being the primary reason. Additionally, ETH spot ETF inflows hit a new high, reaching $726 million on Thursday. Furthermore, BlackRock submitted a revised document to the SEC to add staking functionality to its ETH spot ETF, with these positive news serving as fuel for ETH's price surge.
Glassnode on-chain data reveals that over 317,000 ETH (valued at $1.18 billion) have been withdrawn from trading platforms since early July. This large-scale withdrawal directly caused exchange supply tightening, creating a classic bullish "demand greater than supply" structure. When investors transfer tokens to cold wallets for long-term holding, it often signals strong market confidence in the asset's long-term value.
Battle for $4,000
The battle at this key psychological level has entered an intense phase.
Technical charts show that Ethereum has formed a golden cross at the daily level - the 50-day moving average crossing above the 200-day moving average, a classic signal of establishing a medium-term upward trend. The Relative Strength Index (RSI) continues to rise, and the Average Directional Index (ADX) has surged to 38, reaching its peak since May 17, indicating that the current rebound momentum is still strengthening.
However, market saturation signals have turned yellow.
Ethereum's Network Value to Transactions (NUPL) ratio is approaching the "Belief-Denial" zone. Historical data shows that when NUPL enters this area, Ethereum prices often experience short-term adjustments. This indicator is essentially a "overheating detector" for market sentiment, and when the proportion of profitable investors is too high, it can easily trigger a profit-taking wave.
The current rebound momentum is strong, but caution is needed when approaching the $4,000 threshold due to potential selling pressure.
Key Levels in the Bulls vs. Bears Battle
Breakthrough Scenario: If successfully breaking above $4,000, it will trigger a short squeeze, pushing prices towards the Fibonacci trend expansion point of $4,400.
Pullback Risk Scenario: If blocked at the $4,000 level, it may fall back to the $3,530 support; losing this level could lead to a drop to $3,131, erasing recent gains.
The derivatives market currently shows signs of overheating. On July 21, the total open interest for Ethereum futures contracts exceeded $56 billion, creating a new historical high. When leverage accumulation resonates with high prices, any slight movement could trigger a chain of liquidations. Technical indicators show that the daily RSI has touched the 75 overbought area, and while MACD shows a golden cross, the red bars are shortening, indicating a weakening of short-term upward momentum.
On Monday, attention should be paid to the impact of the Japanese House of Councillors election where the LDP suffered a major defeat on the yen and Japanese stock market. If the yen plummets, it may increase pressure on the Bank of Japan to raise interest rates, potentially dragging down global stock markets as it did last year and impacting the cryptocurrency market. However, the current crypto market remains optimistic due to ETH's positive news and last week's passage of three cryptocurrency bills in the US House of Representatives, but the performance of US stocks on Monday should still be monitored.
For those holding spot assets, remember to reduce positions if profits are good. For those without positions, focus on Ethereum-related and public chain tokens, especially domestic public chains like QTUM and Neo.
