Key Insights
- Ethereum price has surpassed the $4,000 level for the first time since December 2021.
- $207 million in short liquidations occurred, adding hype to the rally.
- Analysts expect a possible altcoin season and market rotation from Bitcoin soon.
Ethereum price has surged past $4,000 for the first time in eight months. This marks the biggest milestone for the ETH bulls and the altcoin market.
Saturday saw ETH climb as high as $4,400 on Binance. This is the highest level since December 2021, after breaking the $4,000 barrier the day before.
The move brings the asset below $900 from its all-time high. This raises hopes that levels of up to $6 are within reach.
Rally Driven by Heavy Trading and Liquidations
The recent breakout was powered by strong trading activity and a wave of liquidations. Ethereum price surge was fueled by over $207 million in short liquidations.
These forced buybacks added intense upward pressure to the rally. This surge in demand helped drive prices higher and triggered further buying interest.
Market analyst Miles Deutscher described this as an “on-chain wealth effect.” Just as ETH rises, whales and retail traders are seeing unrealised gains and reinvesting into smaller, higher-risk tokens.
Deutscher expects a three-phase rotation in the coming months. The first is an ETH-led mini altcoin season, and the second is a shift into Bitcoin.
This pushes the Ethereum price toward $120,000–$140,000. Finally, Deutscher expects a rotation back into ETH and altcoins for a possible blowoff top.
Ethereum Price Strengthens as Bitcoin Dominance Falls
Ethereum price rally is occurring alongside a decline in Bitcoin’s market cap dominance. Friday saw Bitcoin’s dominance fall below 60.7% and touch a significant support zone.
According to popular analyst Rekt Capital, Ethereum now holds roughly 50–60% of the way in its macro dominance uptrend.
While Bitcoin’s dominance may still rebound in the short term, Rekt Capital believes it will eventually break down. It could fall to the low 40% or even the high 30% range. This change could signify more capital flowing into Ethereum and other altcoins.
Whale investors are a significant part of the current rally as well. According to blockchain tracker Lookonchain, Ethereum saw whale inflows on Saturday. This happened as the investors sought to capitalise on Ethereum’s strength over Bitcoin.
Order book data from TheKingfisher also showed a “massive wall” of long liquidations just below $3,960. Some traders interpret this as a reaccumulation zone.
“This is what smart money hunts,” TheKingfisher commented.
Retail FOMO and Sentiment Boost
Market intelligence platform Santiment also noted a surge in bullish chatter from retail traders as ETH crossed $4,000. Investors mentioned words like “buying” and “bullish” twice as frequently, compared to “selling” and “bearish.”
While this shows confidence is rising, Santiment warned that overconfidence can sometimes slow rallies, especially when prices are already high.
Crypto analyst Michaël van de Poppe called the jump of Ethereum price to $4,200 a “wild move.” However, he warned against buying at such highs without considering risk. He indicated that projects within Ethereum’s umbrella could offer better percentage returns if the rally continues.
Support and Resistance Levels To Watch
Between August 8 and August 9, ETH gained over 6% and traded between $3,885 and $4,194. The first major breakout occurred at $4,000 on nearly triple the average daily trading volume. A second surge lifted prices to $4,194 early Saturday before profit-taking set in.
This means current support holds between $4,155 and $4,160, with resistance near the psychological $4,200 mark. In other words, a confirmed breakout above this level could open the door to Ethereum’s all-time highs.
However, consolidation will likely come into play as large players secure profits. If support at $4,155 holds and buying pressure remains strong, ETH may not only reclaim its previous highs. It could also set new records this cycle.
