Will Ethereum Price Hit $5,000 This Cycle? Technical Analysis

Ethereum breaking the $4,000 mark has triggered a massive liquidation wave, reflecting the increasing demand for this top altcoin.

On-chain data shows growing interest and accumulation, suggesting that short sellers may continue to incur losses if Ethereum's price momentum is maintained.

ETH Surpasses $4,000 Due to New Buying Momentum

The new demand increase for ETH has pushed its price up 18% over the past week. Strong buying pressure and improved market sentiment led to breaking the $4,000 price level yesterday, causing liquidations for short sellers.

Data from Coinglass shows short liquidations totaled $184 million in the past 24 hours, while long liquidations remained modest at around $24 million.

This highlights the intensity of short selling as traders rushed to close their positions amid the price surge.

However, on-chain data suggests these investors may face further losses, with ETH likely to continue rising.

For example, ETH futures open interest has increased alongside its price, indicating strong market participation. At the time of writing, this figure reached $51.61 billion, up 10% in the past 24 hours.

Open interest measures the total number of outstanding futures or options contracts in the market. When both asset price and open interest rise simultaneously, it indicates strong trader confidence that the current trend will continue.

For ETH, this suggests many investors are actively opening new positions and confident in the current price momentum.

Moreover, the return of institutional interest further reinforces these price prospects. According to SosoValue, this week saw new capital inflows into ETH-backed ETFs as market sentiment improved.

From 08/04 to 08/08, these funds recorded total inflows of $326.83 million.

The new wave of institutional capital shows returning confidence from major investors, providing a crucial support layer that may sustain ETH's short-term momentum.

Ethereum Maintains Support at $3,909 — Next Targets $4,430 and Beyond

ETH is trading at $4,160 at the time of writing, maintaining a new support level near $3,909. If this support is consolidated and buying momentum increases, ETH could rise to $4,430, potentially testing and breaking through that resistance level.

A successful breakthrough could pave the way for ETH to return to its All-Time-High of $4,827.

On the other hand, if buying pressure weakens, ETH could lose momentum and reverse its current upward trend. If it fails to maintain the $3,909 support, the price could drop to $3,340.