Ethereum Hits $4,800 Liquidity Wall—Can Bulls Break Through or Will Bears Force a Retreat?
Ethereum's rally slams into a $4,800 resistance zone—liquidity pools flash warning signs as traders brace for a potential pullback.
Market psychology at play: The 'wall' isn't just technical—it's where greedy longs meet nervous profit-takers. Classic crypto.
Liquidity crunch: Thin order books above $4,800 suggest bulls need serious momentum to punch through. Meanwhile, derivatives traders are quietly stacking short positions.
Bearish divergence? The usual suspects—overleveraged retail, macro fears, and that one whale who always dumps at round numbers—could trigger the retrace.
Silver lining: Every healthy bull market needs corrections. Just ask the hedge funds currently repositioning their 'long-term holds' for the 17th time this month.
ETF Inflows Break: Sentiment Cooling Down?
The Optimism around Ethereum’s rally cooled just as the week came to a close. Notably, US-based Spot ETH ETFs reported net outflows of $59.34 million on August 15, effectively ending an eight-day streak that had added $3.7 billion in inflows.
The reversal came just as Ethereum failed to clear $4,788, a level within 3% of its all-time high of $4,878, before slipping back to about $4,450. Although BlackRock’s ETHA stood out with $338.09 million in daily inflows, Grayscale’s ETHE and Fidelity’s FETH registered notable withdrawals of $101.74 million and $272.23 million.
Total Ethereum Spot ETF Net Inflow: SoSoValue
Speaking of Ethereum failing to clear $4,788, on-chain data shows a huge cluster of liquidity around this level. Particularly, Merlijn The Trader described the $4,800 as the “final boss” for ETH, pointing to billions in sell orders stacked at that level on Binance’s ETH/USDT pair.
A liquidity heatmap shows a massive concentration of asks in this zone. According to the analyst, breaking above this level could unleash open skies for Ethereum. As long as this level is filled with more asks, there’s a possibility of it acting as a resistance for any upward move. However, clearing this fortress with enough buy volume WOULD not just be a technical breakout but a psychological one, with the potential to push its price to new all-time highs.
Image From X: Merlijn The Trader
Bearish Retracement Scenario
Although the liquidity narrative is currently leaning more towards a bullish breakout than bearish, another analysis from TradingView paints a more cautious picture. The analysis, which is based on the 4-hour candlestick timeframe chart, also identifies the $4,700 to $4,800 region as a supply-heavy resistance where Ethereum has already shown signs of exhaustion after an aggressive rally from early August.
However, multiple technical alignments, such as Break of Structure signals, fair value gaps (FVG), and Fibonacci retracements, show that Ethereum may be due for a retracement. The trade plan outlined anticipates an entry around $4,440, with a stop loss above $4,790 and a downside target of $3,375 at a strong support area. This would imply a corrective MOVE of over 20% if the bearish projection plays out.
Chart Image From TradingView
At the time of writing, Ethereum was trading at $4,465.
Featured image from Unsplash, chart from TradingView
