Ethereum (ETH-USD) has broken through the $4,000 mark for the first time since March 2024, showing a significant recovery. Over the past week, ETH has outperformed Bitcoin (BTC) in growth, adding 7.5% versus BTC’s 3.5%. This marks a change in trend, as Ethereum has lagged behind Bitcoin for the past two years.
Despite ETH breaking through the $4,000 mark several times on December 7 and 8, profit-taking by investors led to a correction. By December 9, Ethereum had fallen to $3,750, down 4% from the previous day. Ether’s market share is 13.1%.
Unprecedented Whale Activity
Last week, the Ethereum network saw a record increase in activity by large investors. Whale transaction volume has surpassed $17.15 billion, up more than 300%, according to IntoTheBlock. This surge was key in allowing Ethereum to test and temporarily exceed the $4,000 mark.
However, the increased activity also triggered pressure from investors taking profits, which led to a decline in the price. Ethereum’s market cap has fallen 4% in the last 24 hours to $453 billion. The daily trading volume reached $63 billion.
Key Support Level and Forecasts
Analysts are highlighting a key support level for Ethereum at $3,560. If this level holds, a rebound to $4,540 is possible, which is in line with the expectations of many traders.
In particular, a trader known in the crypto community under the pseudonym Pentoshi stated in a note on X (former Twitter) on December 9, 2024, that Ethereum, like Bitcoin, “will undergo structural changes.”
“Much like this thread with BTC, $ETH is having structural changes as well as the beginning of consistent and large ETF flows. It just put in a HH, and had it's highest weekly close of the year. There is a not much resistance from here to ath, which should act as a magnet. Above that is clear skies.”
The host of the Bankless podcast holds a similar opinion about the upcoming update of the cryptocurrency's own historical maximums Ryan Adams:
“Ppl are still underestimating the effect ethereum etf flows will have on eth price - which is ludacris because we just saw what it did to bitcoin.”
Adding to the optimism is the continued decline in ETH volumes in exchange wallets. The outflow of coins from exchanges is traditionally seen as a signal of reduced selling pressure, which could support growth, according to Pauline Shangett, CMO at crypto exchange ChangeNOW:
"The outflow of ETH from exchanges is a bullish signal, as the reduction in available coins reduces selling pressure. If the Federal Reserve cuts rates at the upcoming meeting, Ethereum could reach new all-time highs along with Bitcoin, although turbulence is likely in mid-December. Additionally, the return of liquidity to Ethereum could be driven by a decreasing interest in meme coins and more optimistic investor expectations, including a potential reduction in U.S. rates and a more favorable crypto policy from the administration of President-elect Donald Trump. These factors could bolster both the DeFi market and Ethereum itself."
Poseidon noted that the crypto asset is poised for growth, while the venturefounder noted the price of $4,900 as a preliminary resistance level for Ethereum's highest value. At the same time, he pointed out that a weekly close above $4,000 is a clear signal for a breakout from November 2021.
Expectations from the US Federal Reserve decision
The market's attention is focused on the upcoming US Federal Reserve interest rate decision in mid-December. A possible rate cut could be a catalyst for growth for the entire cryptocurrency market, including Ethereum. However, experts warn that this period may be accompanied by increased volatility.
If the Fed cuts the rate, Ethereum will likely rise along with Bitcoin, which could push ETH to the target of $4,540. However, traders should be prepared for turbulence in the coming weeks.
These developments highlight Ethereum's resilience and growing role in the crypto market, where the altcoin continues to attract the attention of both large investors and ordinary users.