For around $4,363, Ethereum (ETH) is once again trading in key territory. Despite price action cooling off from the explosive surge in rallies in July, there are indications that Ethereum may be preparing for a higher leg towards the $5,000 mark in September.
These three factors could lead to the second largest cryptocurrency.
Solid Technical Base: At $4,164, ETH successfully defended the 50-day EMA and reached a dynamic level of support. Despite general market uncertainty, consolidation over $4,000 indicates that buyers are protecting the base. If ETH maintains this level, the path to retesting resistance between $4,600 and $4,800 would be very possible. From there, a clean breakout will put $5,000 in front of you.
- Non-Bitcoin Market Domination: The distance between Ethereum and Bitcoin has grown over the past few weeks. Despite this, Ethereum held profits, but Bitcoin found it difficult to recover the lost ground.
- Preferred macro and on-chain setup: With increased network activity and adoption, ETH continues to have a long-term structure. The 52 RSI indicates that it will not be over-acquired or sold, which could lead to Ethereum rising. ETH support levels are piled up at $4,164. At $3,865 and $3,213, it offers a large amount of buffer against downside risk. If market sentiment improves, this stability could encourage a push to $5,000.
However, there are still difficulties. As investment flows slow in recent weeks, institutional interest in Ethereum appears to have faded. Both institutional and retail players appear to be reluctant to make a big commitment, as evidenced by a steady decline in trading volume. If this pattern continues, Ethereum rally could stall before reaching the milestone.
The technical construction supports driving to $5,000, and Ethereum appears to be very close to a breakout. However, rising ETH may be more difficult than bulls would expect if the institutional flows do not turn again and volumes decline.
