Ethereum (ETH) price has reclaimed a major psychological milestone, surging above $4,000 for the first time in years and hitting an intraday high of $4,237. This marks Ethereum’s strongest performance since December 2021, signaling renewed bullish momentum across the cryptocurrency market. Multiple factors—from institutional inflows to technical breakouts—are fueling this rally, and traders are now watching closely for the next decisive move.

Institutional Demand and ETF Inflows Driving Momentum

One of the biggest catalysts behind Ethereum’s latest surge is the influx of institutional capital via Ethereum Exchange-Traded Funds (ETFs). Since July, ETFs have attracted roughly $1.99 billion in net inflows, with BlackRock’s ETHA ETF alone pulling $727 million in a single day. At the same time, ETH reserves on centralized exchanges have dropped to just 12.3 million—the lowest since 2018 — indicating reduced selling pressure and stronger long-term holding sentiment.

Corporate treasuries are also showing heightened interest, with small publicly traded companies now holding nearly 1 million ETH (worth around $3.5 billion), up from just 116,000 ETH at the end of 2024. Besides, a large short squeeze also contributed to the recent price acceleration, with over $183 million in short positions liquidated as ETH climbed toward $4,200. This forced many bearish traders to cover their positions, adding rapid buying pressure to an already bullish setup.  

Technical Breakout Signals a Breakout Above $5000

•  Ethereum has broken above a multi-year ascending triangle that’s been developing since 2021. The measured move from the pattern’s height (~$1,600) projects a long-term target in the $6,000–$6,200 range if momentum is sustained.

•  Price is now testing $4,425 as an intermediate resistance, with the 2021 all-time high of $4,820 just above. A decisive weekly close above $4,820 could unleash a rapid rally toward $5,500, with $6,000 in sight if buying pressure remains strong.

• The former breakout level around $4,000–$4,050 is now a critical support. Any healthy pullback that holds above this zone could provide a launchpad for another leg up toward $4,425 and then $4,820.

• The weekly RSI sits at 69.6, indicating strong bullish momentum but nearing overbought territory. If RSI climbs into the 75–80 zone, ETH could see another sharp move toward $5,500+, but traders should watch for early signs of bearish divergence.

• A rising trendline from 2020, now near $3,200, continues to underpin Ethereum’s macro bullish structure. As long as ETH trades above this line, the broader uptrend remains intact, supporting the potential for a $6,000+ target in the coming cycle.

If ETH fails to hold above $4,000, traders may see a pullback toward $3,800 before the next attempt at an upside breakout. However, maintaining the current momentum could see Ethereum pushing toward multi-year highs.