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Ethereum Struggles to Break $4,000—What’s Really Holding It Back?
For the past few months, Ethereum (ETH) has been struggling to break above the $4,000 mark. Despite a slight bounce back from its recent low, it seems like the price is stuck in a downward trend. With analysts split on what might happen next, let’s take a closer look at what could be holding ETH back.
Why Can’t Ethereum Break the $4,000 Barrier?
The main culprit behind Ethereum’s inability to push through this barrier is the lack of trading volume. For the past few weeks, it has been dropping by nearly 15% compared to previous periods. This drastic decline in interest means that there aren’t enough buyers to push the price upwards.
Additionally, Ethereum futures are showing a negative premium for the first time since early November. This signifies a shift in sentiment towards bearish expectations, making it less likely that ETH will surge above $4,000 anytime soon.
The recent sell-off, triggered by a massive liquidation event of $299 million on December 17, has only added to the bearish tone surrounding Ethereum. The market is now more cautious than ever before, and any attempts to push through the psychological barrier of $4,000 would be met with significant resistance.
Even the Ethereum Foundation’s unexpected sale of 100 ETH on December 17 didn’t help alleviate concerns. The sudden drop in price caused a ripple effect throughout the market, further solidifying bearish sentiments.
Analysts are divided about what to expect moving forward. Some believe that sentiment could shift and push ETH higher, while others are more pessimistic due to factors like the high supply of ETH and an increasingly negative market environment.
What’s Next for Ethereum?
Given the recent price action, it seems likely that Ethereum will face further challenges before making any significant moves upward. However, as we’ve seen in the past, markets can be unpredictable, and surprises are always possible.
For now, investors should exercise caution when considering ETH investments, especially with the market showing signs of uncertainty.
Source: coinpedia.org
