Ethereum’s $4,000 Battle: Can ETH Defend This Critical Support Level?

Ethereum faces its moment of truth as bulls and bears clash at the $4,000 threshold.

The Psychological Fortress

Traders watch with bated breath as Ethereum tests a level that separates optimism from panic. This isn't just another number—it's the line in the sand where market sentiment could flip.

Technical Tug-of-War

Buyers dig in their heels while sellers test their resolve. The charts show consolidation patterns that scream 'make or break'—volume spikes hint at institutional players positioning for the next big move.

Market Mechanics at Play

Liquidations loom large on both sides of this trade. A hold above $4,000 could trigger short squeezes while a breakdown might unleash cascading sell pressure. The derivatives market holds its breath.

Wall Street would call this 'price discovery' while charging you 2% management fees for the privilege. Ethereum either proves its resilience here or gives the traditional finance crowd another tired 'I told you so' moment.

Can $4,000 support stop a 20% slide so far?

Source: TradingView

The 4-hour chart for $ETH illustrates that the price has recently been trading nicely in accordance with support and resistance levels. The bulls will hope that this continues to hold true, given that the price has settled perfectly above the $4,000 major horizontal support level, at least for the time being.

This area is of huge importance to the $ETH bulls, and they will be frantic to stop the rot of a reversal that tallies 20% from top to bottom so far. 

At least in this short-term time frame, if the bulls can manage to hold the price at or around this level until the Stochastic RSI indicators can touch bottom and turn back up, the resulting upside price momentum could push the price back up to the $4,200 resistance level, and perhaps beyond.

Momentum indicators reach bottom on the daily

Source: TradingView

The daily chart provides a clearer view of what could happen to the $ETH price next. If the price does fall through the major support, $3,800 is possibly the next support level, which could line up with the ascending 100-day SMA.

Besides the fact that this is a key horizontal level, the bulls will be encouraged by an impending turn back to the upside by the daily Stochastic RSI indicators. This will signal upside price momentum. Unfortunately, this is not likely to happen quite yet as the indicators will need to get above the 20.00 level first.

Perfect retest of $4,000 to confirm support?

Source: TradingView

The weekly chart goes further, and really puts things into perspective. After making the all-time high at $4,950, the price has returned to retest the major $4,000 horizontal support. This resistance/support level has mainly acted as resistance on several occasions since May 2021. Returning to retest this as new support is technically and structurally an excellent thing to do. 

If this level holds, it WOULD provide a fantastic base from which the $ETH bulls can launch their next upward move. On the other hand, if the level fails and the price confirms below, a move back down to at least $3,500 could be next. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.