Ethereum is facing a significant test as its price approaches the critical $4,400 resistance level, a point that has historically acted as a barrier triggering price reversals. The asset is currently trading around $4,206.
On-chain metrics present a bullish picture suggesting potential for upward movement. A key indicator is the declining Exchange Supply Ratio (ESR) across all exchanges, signaling a reduction in tokens available for sale and implying decreasing selling pressure. Significant spot market net outflows, reaching $245.57 million, further bolster this view, indicating potential accumulation by larger investors, commonly referred to as whales.
Despite the positive signals, significant risks warrant investor caution. Highly leveraged positions on prominent exchanges like Binance amplify the potential for volatility. Unexpected market shifts could trigger substantial liquidations, creating sharp price swings.
Adding to the near-term uncertainty is the existence of dense liquidation clusters identified through liquidation heatmaps in the price range between $4,300 and $4,400. A decisive push through this crucial $4,400 resistance zone has the potential to accelerate price movements significantly, but failure could lead to swift pullbacks fueled by liquidations.