Since the price of Ethereum (ETH) fell below 4,000 USD on December 17, it has struggled to recover that level, sparking speculation that ETH may not return to this zone before the end of 2024.
However, the 5% price increase in the past 24 hours suggests sentiment may be changing. For Ethereum to challenge the 4,000 USD mark again, a number of key factors need to converge. This is what needs to happen.
Ethereum holders prepare to overcome obstacles
According to information from In/Out of Money Around Price (IOMAP), the current Ethereum price is strongly supported at 3,352 USD. At this point, 3.34 million Ethereum addresses hold 3.18 million coins and are in profit.
IOMAP classifies addresses based on unrealized profit, loss, or break-even point. The larger the volume or number of addresses in an accumulation zone, the stronger the support or resistance. Therefore, large volumes outside of profit signal stronger resistance, while large volumes in profit indicate stronger support.
As seen below, the main resistance level for Ethereum's price to break through is at 3,508 USD. Here, 3.90 million Ethereum addresses have bought 1.62 million ETH. Therefore, if buying pressure increases, the value of this cryptocurrency could overcome the obstacle and trade close to 4,000 USD.
Another indicator supporting the bullish price trend is the Coin Holding Time. As the name suggests, Holding Time measures the average length of time a cryptocurrency has been held without being sold or traded.
When holding time increases, it indicates that holders are not selling. Conversely, when holding time decreases, it suggests investors are selling.
According to IntoTheBlock data, Ethereum's holding time has increased by 332% in the past seven days. If this trend continues, the bullish case for Ethereum outlined above could be confirmed.
ETH Price Forecast: Higher Values Ahead?
From a technical standpoint, ETH has broken above the Ichimoku cloud. The Ichimoku cloud is an indicator that identifies support and resistance levels. When the cloud is above the price, it indicates resistance.
But when the price is above the cloud, it indicates support, which could push the price higher. Therefore, for ETH, the cryptocurrency's value could rise to 4,109 USD. If the bulls hold above 4,000 USD, the value could increase to as high as 4,500 USD.
However, if the bears take control, things may not play out that way. In that scenario, Ethereum's price could drop to 3,111 USD. If selling pressure intensifies, the price could fall below 3,000 USD.
