ETH Retests $4,000: Is the Bull Market Returning?

1. Latest Market Trends Overview

Recently, the price of Ethereum has repeatedly hovered around $4,000. The fundraising rate of ETH has shown a significant decline and has turned negative for the second time. When it fell below $4,000, there was a massive futures liquidation in the market, especially with long positions being forced to close, putting further pressure on the price. At the same time, there has been a large withdrawal of funds from ETH ETFs in the US market, with the redemption scale approaching $800 million this week, the largest single-week redemption scale to date. It is worth mentioning that REX-Osprey has launched the first US Ethereum staking ETF, which holds ETH and distributes staking returns to investors. This new product may affect capital allocation and long-term holding motives to some extent.

In summary, the market is in a state of high-pressure fluctuations, with both buyers and sellers testing each other’s bottom lines.

2. Why is fundraising interest rate important

The funding rate is essentially the mechanism for the flow of funds in the perpetual contract market. It reflects the game of forces between bulls and bears:

• When the bulls pay the bears (with a positive funding rate), it indicates that the bulls are dominant;
• When the funding rate turns negative, it means that the bears are dominant, and the bears are paying the bulls.

ETH has recently experienced multiple instances of funding rates turning negative, indicating an increase in short-selling sentiment. However, it is important to note that the rates may vary across different trading platforms. The overall network’s “8-hour average funding rate” has recently been recorded at 0.0039% (slightly positive), suggesting that there may still be a contest between long and short positions on certain exchanges.

Overall, the fundraising rate provides a “thermometer” for the market: it is currently leaning towards caution, with bears having the advantage.

3. Technical Structure + Indicator Interpretation

support level

• $4,000 is a key psychological and technical support level, and once it is breached, it may trigger a downward movement.
• If it breaks, the 100-day moving average (around $3,700) may become the next support; in a weaker scenario, the $3,500 area could become a strong accumulation zone.

resistance level

• It needs to break through the resistance of the 20-day and 50-day moving averages above before it can gain further rebound space.
• The medium-term resistance may be located in the $4,500 area.

Indicator Analysis

• The RSI and stochastic indicators have a tendency to enter the oversold zone, which means there may be a potential rebound adjustment in the short term.
• However, the indicators have not yet shown a clear bullish signal, and the rebound may be suppressed by resistance.

Combining technical analysis, the most likely scenario currently is: if $4,000 holds, there may be fluctuations within the range; if it breaks down, the risk of further decline is higher.

4. The focus of contention between the bulls and bears

bearish advantage point

• The negative fundraising rate indicates that the bears are taking the initiative;
• Large-scale redemptions of ETFs have occurred, and institutional funds are withdrawing;
• The risk of liquidation remains high, and a chain reaction could exacerbate the downturn.

Bullish Counterattack Point

• If $4,000 is consolidated properly, it may attract dip buyers and short covering;
• Long-term investors and whales laying out at the bottom may provide support for a rebound;
• The continued development of the Ethereum ecosystem, clear regulatory policies, and the emergence of innovative ETF products may catalyze a trend reversal.

Taking the ETH + Staking ETF launched by REX-Osprey as an example, it will directly pass on staking rewards to investors, which may attract some funds to hold ETH for the long term.

However, the risks that need to be noted cannot be ignored: macroeconomic factors (US dollar trends, interest rate policies, geopolitical risks, etc.) remain key variables.

5. Summary of Investment Strategies and Views

Here are a few suggestions for beginners or conservative investors:

• If the price fluctuates around $4,000, it is advisable to avoid heavy positions or chasing highs, and to maintain a wait-and-see approach while gradually participating.
• If a clear breakdown signal occurs (such as closing below $4,000 with increased volume), consider reducing positions or hedging short.
• If the price holds and rebounds to break through the resistance, then you can gradually accumulate positions to go long.
• Whether going long or short, strict stop-loss settings and position control should be established to avoid liquidation.

From a medium to long-term perspective, Ethereum still has upward potential, especially in the context of expanding network ecology, the popularization of DeFi / Web3 applications, and ongoing support from capital entry. If favorable news occurs (such as policy breakthroughs, major upgrades, or institutional entry), it could become a catalyst for reversal.