Ethereum Ready For $4,000 Crack? Expert Identifies On-Chain Triggers for Potential Rally
As Ethereum (ETH) started the year by recovering past the key $3,000 level during the broader cryptocurrency market rally in early 2026, it continues to struggle against the key resistance level at $3,400. Currently, the second largest cryptocurrency is entering the consolidation phase under this important symbol.
Technical analyst Ali Martinez suggested that if the buying momentum seen in recent weeks persists, Ethereum may soon begin a new rally that could bring it closer to reaching all-time highs.
Ethereum Is Ready for a Potential Price Break
The latest review shared on social media platform iX (formerly Twitter), Martinez pointed to on-chain indicators that suggest a new bullish sentiment among Ethereum investors. Notably, daily active addresses on the Ethereum network have increased, doubling to exceed 800,000 in just two weeks.
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Martinez’s analysis also shows a potential correlation with the growing demand for Ethereum exchange-traded funds (ETFs). As of December 29, these investment vehicles have accumulated approximately 158,545 ETH, a total of approximately $520 million, adding to the positive outlook of the altcoin.
This is increasing on-chain work it has created major levels of support for Ethereum’s price action going forward, especially between $2,772 and $3,109 which could prevent a new decline under these key indicators.
Martinez believes that if these support levels remain strong and buying pressure continues, a break above the key resistance of $3,400 could pave the way for a key rally towards $4,000—representing a potential upside of 24.33% from its current trading level of around $3,217.
What’s Next for Altcoins?
Some analysts, such as those from BitBull, share the an optimistic view of the price of ETH. The analyst has identified a potential upside head and shoulders pattern on the 10-day chart, which could lead to a bullish price target of $5,000. This projection represents an impressive increase of 55.48%, surpassing last year’s record high.
However, despite these bullish predictions, the price of Ethereum fell by 3% within a 24-hour period, according to CoinGecko data. The cryptocurrency has yet to show the bullish momentum needed to meet these goals.
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Another motivating factor for bullish investors is rising currency. Market expert Ted Pillows recently noted that, following Ethereum’s recent price drop, the biggest pain point seems to be leaning towards the top.
Historically, large investors and institutions have tended to “hunt” money levelswhich helps to reset the position in the market and remove many retail investors.
With about $3.4 billion in short positions at risk if Ethereum successfully breaks the $3,400 mark in the coming days, it is possible that a significant price movement is imminent.
Featured image from DALL-E, chart from TradingView.com
