FameEX Hot Topics | Ethereum Shows Chart Divergence, Yet On-Chain Metrics Forecast a $4.5K Surge

Despite Ethereum's impressive performance, the market remains cautious due to the presence of bearish technical signals. While the price continues to test the $4,000 resistance, the relative strength index (RSI) has failed to show the necessary bullish confirmation. This failure to align with new price highs on the RSI could indicate a weakening of buyer momentum, a pattern that has often been seen during local tops in the past. The divergence between price action and RSI might signal a potential slowdown, as the market grapples with whether to sustain the bullish push or face a correction.

Zooming out to the daily chart, the bearish divergence persists, not fully resolving since Ethereum crossed above the $3,500 level. This prolonged divergence suggests that despite the overall bullish sentiment, there is an underlying hesitancy in the market. If the price fails to break through the $4,000 level with significant volume and momentum, a retracement to key support zones becomes increasingly likely. A failure to maintain upward momentum would likely trigger further consolidation, potentially leading to a short-term correction that would test the strength of the support levels beneath.

The narrative of Ethereum’s resilience is further complicated by the risks of overheating once it surpasses the $4,500 target. While the potential for rapid gains exists if the price breaks through key resistance levels, the danger lies in the possibility of a sudden price reversal once the market becomes overextended. This type of market volatility could quickly wipe out gains and result in sharp corrections, highlighting the delicate balance between optimism and risk.

The increasing dominance of Ethereum in the futures market is a clear sign of the growing interest and confidence in the asset. As Ethereum continues to outperform Bitcoin in futures volume, it is evident that traders are betting heavily on Ethereum’s future growth. The question now remains whether this momentum can be sustained or whether the technical signals will play a larger role in halting the rally.

Ultimately, Ethereum's price will likely be determined by how it handles the $4,000 resistance and the potential breakout or pullback from this key level. As traders wait for a clear signal, both bullish and bearish indicators are at play, and the market's response to these mixed signals will likely set the tone for the coming weeks.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.