19 December 2024
Sentiment for Ethereum (ETH) has reached its lowest levels in a year as the second-largest crypto by market capitalization struggles to reclaim the $4,000 mark. Despite investors’ sentiment, some analysts suggest that the King of altcoins is about to kickstart its bullish run to new highs.
Ethereum Sentiment Drops To Yearly Low
According to crypto analyst Ali Martinez, Ethereum social sentiment has hit a one-year low amid its struggle to turn the $4,000 resistance into support. Per the post, this metric reached its most negative levels since December 18, 2023, when ETH was trading around $2,100-$2,200.
The analyst pointed out that this is a “classic bullish indicator,” noting that when sentiment hit “rock bottom” a year ago, ETH’s price rallied around 30% in the following weeks. The cryptocurrency climbed to the $2,700 mark by January 12, a key level in ETH’s rally to the March high of $4,093.
If Ethereum followed the same pattern, the cryptocurrency could see a jump to the $4,900-$5,000 price range in the next month, potentially turning the next big resistance level into support in the following two weeks.
Martinez explained that the crypto’s rally will resume once ETH clears the $4,100 resistance, a level not seen since December 2021. Once this level is recovered, “$6,000 will become a magnet.”
After breaking past the $4,000 mark this month, the second-largest crypto has struggled to turn this level into support. Its latest breakout attempt occurred at the start of the week when Bitcoin (BTC) surpassed its previous ATH.
While BTC traded above the $107,000 range, Ethereum surged to $4,100 but quickly retraced to $3,900 before seeing a correction to the $3,800 level. Despite the pullback, ETH still registers gains in the weekly and monthly timeframes, recording a 2.3% and 22.6% increase, respectively.
Will ETH Break Past $4,000 This Month?
Altcoin Sherpa highlighted that ETH is “roughly at the same spot that BTC was at around 70K,” adding that it hasn’t “materially broken this level for years.” In the last three years, ETH has been rejected from the $4,000 level several times but ran to its all-time high (ATH) when it was held in 2021.
If it were to mirror Bitcoin’s performance, the cryptocurrency could see a run to its $4,800 ATH before aiming for its first price discovery target of around $5,000. The analyst also noted that December and January are the “best times” for the Altcoin market’s performance.
Similarly, Benjamin Cowen previously highlighted that ETH’s pair against BTC is “still following a familiar pattern” where Ethereum historically finds “renewed strength” between December and January.
Nonetheless, Sherpa forecasted that the ETH/BTC pair would likely see one “final shakeout” before going “up for a few weeks/months.” To achieve this, the token must break past its recent 0.041 high.
Trader and analyst Skew warned that breaking past the $4,000 resistance will take “even more buying pressure” as this price has “some massive seller continuously topping up supply.” Lastly, he stated that holding the $3,800 level was key to continuing the rally.
As of this writing, ETH is trading at $3,874, a 2% decline in the daily timeframe.
