Ethereum breaks through the $4800 mark, triggering a technical correction that may reshape its short-term trajectory. Liquidity metrics show mixed signals as Ether bulls gear up to defend key support levels. This consolidation phase occurs amidst solid blockchain fundamentals, raising questions about the market's ability to sustain its rally.
ETH touched a peak of $4,760 before retracing part of its recent gains. This correction follows classic market dynamics after a rapid ascent that saw the price climb more than 35% in just a few weeks. Traders are closely monitoring the $4,200-$4,400 zone, which now constitutes a major support level.
This correction primarily occurs as ETH reached a liquidity zone protected by smart money. Indeed, the Order Block in HTF indicates a strong presence of sell orders, now constituting a fierce resistance between $4,692 and $4,771.
Trading volumes remain elevated during this consolidation phase, suggesting that active market participants are repositioning their orders rather than fleeing en masse. This dynamic differs from the brutal corrections observed in the past and could indicate a gradual accumulation phase.
On-chain analysis reveals that wallets holding between 100 and 10,000 ETH continue to accumulate despite the volatility. These “medium whales” are adopting a buy-the-dip strategy, reinforcing the thesis of a healthy correction before a potential resumption.
On the 30-minute chart, ETH seems to have found its bottom at the liquidity zone around $4,400. However, the 12H Order Block mentioned earlier has been reinforced by new selling in this area. If you’re buying ETH at current levels, you should consider taking profits as price approaches $4,600-$4,700, offering a potential 5% gain.
But as long as the zone between $4,600 and $4,800 remains unbroken, a return to $4,100-$4,200 before the bullish rally resumes remains probable.
Liquidity indicators on major exchanges show a notable improvement. The depth of the order book has strengthened around key support levels, reducing the risk of a flash crash and offering a more stable base for a potential rebound.
The funding rate for perpetual contracts remains moderate, avoiding the excesses of euphoria that typically precede more violent corrections. This normalization of derivatives metrics suggests a more balanced market between long and short positions.
Open interest on futures contracts continues to grow without reaching alarming levels. This controlled progression indicates sustained institutional interest in Ethereum, particularly in the context of spot ETFs drawing increasing volumes.
The ETH/BTC ratio shows signs of stabilization after a period of relative underperformance. This trend could signal renewed interest in Ethereum compared to Bitcoin, especially due to staking yields attracting institutional investors seeking returns.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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