Ethereum Rally Pauses — But Indicators Signal Another Surge Ahead

Ethereum’s price has been nearing the much-anticipated $4,000 mark, yet the rally seems to have hit a temporary halt.

Although the market has shown signs of saturation, Ethereum is far from finished with its upward movement. The recent consolidation is likely a short-term pause before another leg up.

Ethereum Is Showing Signs Of A Rally

Ethereum’s trading volume is sharply increasing, a signal that retail investors are showing renewed interest. While Ethereum’s price ratio to Bitcoin dropped by nearly 6% this week, the surge in trading volume mirrors a pattern seen in May earlier this year. Such a spike often precedes a local top, but this time it may be different.

Should both trading and social volume decrease for the rest of the week, this could indicate that the market is preparing for another bullish surge. The impatience and profit-taking behavior from retail investors may set the stage for the next upward wave.

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Looking at broader technical indicators, the NUPL (Net Unrealized Profit/Loss) suggests that Ethereum is poised for a significant rally. The NUPL indicator, when reaching a threshold of 0.5, historically has signaled a pause in the uptrend, followed by a sharp rally.

Ethereum is currently nearing this threshold, which, in the past, has marked the beginning of powerful upward price action. As the NUPL indicator continues to rise, it provides a strong historical precedent for Ethereum’s next price rally.

Ethereum NUPL. Source: Glassnode

ETH Price Is Treading The Waters

Ethereum is currently trading at $3,666, just 9% away from the critical $4,000 resistance that many investors have been waiting for over the past seven months. The altcoin is expected to continue its upward momentum despite the recent consolidation, with the potential to breach the $4,000 mark soon.

The continuation of the bullish trend is supported by strong market sentiment and technical indicators. As long as Ethereum remains above its key support levels, the price is likely to surge toward $4,000.

If Ethereum can maintain its momentum, a breach of $4,000 could act as a catalyst for further gains.

ETH Price Analysis. Source: TradingView

However, should unforeseen selling pressure arise, Ethereum’s price could slip below the $3,530 support level. In such a scenario, Ethereum may fall to $3,131, invalidating the current bullish outlook. The key will be maintaining support and capitalizing on the retail-driven surge.