Ethereum’s repeated failure to hold above the $4,000 mark is more than a psychological blow; it’s a sign of weak market dynamics that is testing the patience of traders and the stability of leveraged positions. The struggle at this key level stems from a combination of technical resistance, a lack of new buyers, and shifting institutional flows.
The $4,000 Resistance Wall
The price zone between $4,000 and $4,100 has solidified into a formidable barrier. Recent attempts to push past $4,020 and $4,100 have resulted in classic failure patterns, with analysts noting the formation of bearish technical setups.
This level has become a focal point of frustration. As one trader noted, there is “strong resistance at $4K”, and breaking it is “pretty critical in the short/mid term going forward”. The last time Ethereum was rejected from this area in December 2024, it preceded a significant 66% drop, a history that likely weighs on current market sentiment. For the recovery to be secured, bulls need to achieve a decisive daily close above this supply zone to signal the start of a new uptrend.
The Demand Problem: Where Are the Buyers?
A core reason for Ethereum’s inability to break through is a simple lack of demand. The momentum from spot buyers is weak, and the much-anticipated spot Ethereum ETFs have recently become a source of selling pressure rather than support.
Data reveals that spot Ethereum ETFs have seen significant outflows, with $145.7 million leaving in a single day and total net outflows reaching $640.5 million over an eight-day period. This indicates that institutional money is not providing the steady demand needed to absorb selling pressure. The “spot volume delta” metric, which measures the net difference between buying and selling, confirms that net spot buying on exchanges remains negative, suggesting any price rebound lacks strong underlying demand.
Technical Breakdown and Bearish Targets
The repeated rejections at the $4,000 level are not just frustrating; they are forming bearish chart patterns that project further downside. The price action over the past two weeks has led to the formation of a bear flag pattern on the 12-hour chart.
This pattern was confirmed when the price broke below the flag’s lower boundary at $4,000, signaling the start of a significant breakdown. The measured target for this technical pattern points to a drop to around $3,100, which would represent a roughly 20% decline from current levels. This technical outlook reinforces the negative sentiment and makes buyers hesitant to commit at current prices.
A Costly Struggle for Leveraged Traders
This battle at $4,000 has real and costly consequences, particularly for over-leveraged traders. The high volatility around this key level has triggered massive liquidations, serving as a stark reminder of the risks in the market.
In one notable case, a single whale saw their massive leveraged long position of 9,152 ETH completely liquidated, resulting in a loss of over $45 million after the price fell below $4,000. This incident highlights how quickly fortunes can reverse when the market moves against highly leveraged positions and underscores the extreme volatility that defines these key psychological price levels.
