Ethereum Holding $3700: The Make-or-Break Level for a Q3 Mega Rally

Ethereum's flirting with $3700 isn't just another price level—it's the launchpad bulls need for a Q3 moonshot. Here's why.

The $3700 Litmus Test

Break it, and ETH could see a cascade of liquidations—hold it, and traders might pile in like Wall Street on a mediocre IPO.

Liquidity Magnet

That $3700 zone? A textbook liquidity pool. Market makers salivate at these levels, ready to trap retail or propel the next leg up.

Derivatives Domino Effect

Perpetual swaps funding rates hover near neutral—a coiled spring. A sustained hold above $3700 could trigger a gamma squeeze that'd make 2021 memecoins blush.

The Cynic's Corner

Of course, if it fails, the 'fundamentals are strong' crowd will blame macro. They always do.

ETF Mania hits Ethereum’s market!

The excitement is easy to understand when you follow the money. The second quarter saw a massive $1.7 billion flood into the new U.S. Spot ethereum ETFs, wiping out the previous quarter’s losses. Q3 has already seen single weeks with nearly a billion dollars in new money, with BlackRock’s ETHA fund leading the pack. All this buying from big-money players creates a floor that can soak up a lot of selling pressure.

Source: Coinglass

Pro traders are betting big on a sustained climb. Activity in the Futures market exploded by 56% in Q2, averaging over $51 billion daily. The cost to hold a long position remains high, a clear sign that bulls expect the price to keep running.

It’s not just market hype either as the network itself looks healthier than ever. More people are using Ethereum wallets than at any point in its history. Long-term believers aren’t selling either.

A record 30% of all ETH, over 35 million coins, is now staked and off the market. Even the biggest players, the so-called “whales,” are buying more, with data showing they snapped up another 240,000 ETH this month alone.

Source – LookOnChain

However, a rally isn’t a sure thing. The whole crypto market is still at the mercy of the Fed. If inflation stays sticky, any hint of rate hikes could strengthen the dollar and send risky assets like crypto tumbling. And, let’s not forget, summer is usually a dead zone for crypto trading. Historically, Q3 is Ethereum’s worst-performing quarter unless something big happens.

Could the ETFs that sparked this rally also kill it? We saw it with Bitcoin – A big price dump right after its ETFs went live as early money cashed out. Some analysts see a similar short-term drop for Ethereum, maybe back to the $2,800 to $3,100 zone, before things turn around. On the charts, if ETH can’t break through that $3,700-$3,800 ceiling, things could get ugly fast.

All about ETH’s price performance and competitors

Traders are watching the support at $3,500 and $3,420. Fall below those, and the door opens to a much steeper slide. In fact, some nightmare scenarios even point to $1,600.

Behind the price action is Ethereum’s own civil war – Its scaling solutions. Layer-2 networks like Arbitrum and Base are a lifeline, handling most transactions and keeping fees low. They’ve kept users from fleeing to cheaper chains, but they also siphon away fee revenue that used to belong to Ethereum’s main network, making them both allies and rivals.

Meanwhile, genuine competitors are knocking at the door. Solana is a real threat, winning over projects with its speed and cheap transactions. Avalanche is carving out its own niche for custom blockchains. The future is probably a mix of all these chains, but Ethereum can’t afford to lose any more ground to them.

The next big upgrade, “Fusaka,” could be another ace up Ethereum’s sleeve for late 2025. It’s designed to make Layer-2s even cheaper, with the dream of sub-penny transactions – A story that institutions love to hear.

Everyone is watching Ethereum because when it runs, it tends to pull the entire altcoin market with it. bitcoin has had its turn, and now many think it’s Ethereum’s time to shine. The ETH/BTC chart looks ready for a reversal, suggesting ETH might finally start outperforming Bitcoin. If those ETF billions can push the price past $3,700 for good, it could be the starting pistol for the next crypto bull run.

Source: TradingView

At the time of writing, ETH was down almost 6% after a hike worth 73% on the price charts. Valued at $3,624, the altcoin’s Moving Average seemed bearish thanks to its position below the price candles. ETH’s RSI was on its way down from the overbought zone too.

So, can Ethereum do it? The money is there, the network is strong, and the whales are buying. But the Fed, the summer slowdown, and fierce competition are all major hurdles. This fight for $3,700 isn’t just about a number; it’s about whether Ethereum has what it takes to lead the market again.