Key Points
- Ethereum [ETH] is predicted to soon reach $5,000, despite potential resistance between $4,522 and $4,646.
- Increasing confidence in Ethereum and rising active addresses suggest a bullish outlook.
Ethereum [ETH] Poised for $5,000
Analyst Ali Martinez predicts that the price of Ethereum [ETH] could soon reach $5,000.
However, before this can happen, ETH must overcome a supply wall between $4,522 and $4,646.
Understanding the Supply Zone
A supply zone represents a collection of buy orders, designed to prevent the price from dropping.
Martinez, using IntoTheBlock’s data, found that 600,000 addresses purchased 1.63 million ETH in this region.
This area now represents a resistance for Ethereum, as some buyers may aim to break even.
Analyzing the Liquidation Heatmap, it was found that large-scale liquidations could occur if ETH hits $4,205.
However, if ETH successfully closes above this price, it could potentially climb even higher.
The chart indicates that Ethereum may not encounter significant resistance below $4,310.
If ETH surpasses $4,860, the path to $5,000 could become much easier.
Funding Rate and Active Addresses
The Funding Rate, the difference between a perpetual contract’s price and a cryptocurrency’s spot price, was also examined.
Ethereum’s aggregated Funding Rate was 0.068% according to Santiment’s data, suggesting that ETH was trading at a premium perp price above the index value.
The high metric reading, coupled with the rising ETH price, indicates that shorts are aggressive.
However, this aggression is not paying off, suggesting that ETH’s price action could be bullish.
The number of active addresses on the Ethereum network has also increased, with 537,000 active addresses at press time.
This increase suggests growing interest and confidence in Ethereum, which could be seen as a bullish signal by traders.
While Ethereum may experience some pullback as it aims for a new all-time high, indicators suggest that any potential retracement may not last long.
