ETH Eyes $4.4K Retest Amid Liquidity Shift

Key takeaways:

• Ethereum failed to break $4,800, with a bearish divergence leading to a 3% correction.

• Spot selling pressure rose, but leveraged traders remained active.

• A rebound from $4,400 could reset bullish momentum toward new highs.

On Monday, as Bitcoin (BTC) rallied to a new all-time high, Ether (ETH) failed to clear its resistance at $4,800, triggering a sharp 3% correction below $4,500 on Tuesday. The price dip took place on the back of a bearish divergence on the four-hour chart. This typically indicates that buyers are losing strength, often preceding a local top or short-term reversal.

ETH retested the $4,500 level, with onchain and derivatives data showing mixed signals. While spot cumulative volume delta (CVD) has dropped sharply, indicating net selling pressure in the spot market, futures open interest and futures CVD have remained elevated. This suggested that leveraged traders are still active and positioning for volatility, even as spot buyers take profits.

Such conditions often attract sidelined participants watching for liquidity-driven entries rather than impulsive moves. A potential liquidity sweep near $4,400, where stop orders are typically clustered, could serve as a short-term reset. A strong rebound from this zone would invalidate the bearish setup and signal renewed bullish continuation this week.

However, if ETH fails to defend this region, the correction could extend toward $4,250 to $4,100, where both a four-hour and one-day order block coincide. These overlapping zones often represent high-interest demand areas where large buy-side orders were previously concentrated, making them key levels for potential trend reversals.

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“Liquidity lag” for Ether may be narrowing

According to XWIN Research, the US M2 money supply, a measure of liquidity in the economy, has expanded to a record $22.2 trillion. While Bitcoin has surged over 130% since 2022 in response to this liquidity wave, Ether remains up only 15%, highlighting a “liquidity lag.”

Yet, several onchain metrics suggest Ether may be catching up. Exchange reserves have fallen to around 16.1 million ETH, down over 25% since 2022, reflecting a sustained decline in sell-side pressure. Net exchange flows remain negative, indicating that ETH is moving into self-custody and staking, reducing available supply.

Crypto trader Skew noted that the recent rally marked the “fourth tap” of the $4,700-$4,800 zone. If ETH manages to hold this area, “that would be pretty bullish.” If not, a deeper pullback could form a higher low, potentially setting up the next leg upward.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.