ETH Faces Key $3.9K Test Amid Record Spot ETF Inflows

Key takeaways:

• Ether faces a liquidity battle between the $3,900 support and $4,400 resistance.

• Record ETF inflows of 649,000 ETH highlight sustained institutional demand.

• Long-term projections remain bullish, with dips toward $3,000 to $3,500 seen as setups for a rally toward $8,000.

Ether (ETH) is entering a decisive trading week after recording its highest weekly candle close in over four years, with the price action currently caught between two critical liquidity zones, driving price fluctuations of more than 11%.

On the downside, ETH established a Monday low at $4,224, placing immediate focus on the $4,150 level, a support zone reinforced by multiple liquidity lows. Just beneath lies a fair value gap around $4,000, aligning with the 0.50–0.618 Fibonacci retracement range between $4,100 and $3,900. This confluence suggests an attractive area for swing traders to establish bids.

Trading platform Kiyotaka highlights this zone as a “giant cluster of resting bids stacked all the way down to $3.9K,” making it a critical range to watch for liquidity-driven stop hunts and potential reversals.

To the upside, Ether faces an immediate liquidity cluster near $4,400, the imbalance formed during the Monday lows, which may act as a near-term magnet before a potential retracement. A sustained bullish reaction at this level could propel ETH toward $4,583, a higher time-frame resistance.

A confirmed break and stabilization above this level would strengthen the case for a new all-time high in the days ahead, extending the coin’s multi-week bullish momentum.

From a structural standpoint, a deeper retest near $3,900 may be the more constructive scenario for bulls, as it would flush out early long positions and fuel liquidity for a stronger recovery toward $4,500 and new highs in Q4.

Meanwhile, the four-hour relative strength index (RSI) remains below 50, suggesting room for further downside before ETH enters oversold territory and sets up for a potential bullish breakout.

Related: Bitcoin, Ether set for squeeze as traders go record short ETH at $4.3K

Institutional flows and long-term setup keep Ether outlook bullish

Despite short-term liquidity battles, the broader outlook for Ether remains firmly bullish, supported by record institutional inflows and a favorable technical backdrop.

Last week, US-listed spot Ether ETFs recorded nearly 649,000 ETH in net inflows, the largest weekly haul on record. While ETH briefly touched $4,740 before a weekend pullback, the inflow momentum highlights deep institutional demand.

Market analysts have also turned increasingly positive on Ether’s positioning relative to Bitcoin. Senior ETF analyst at Bloomberg, Eric Balchunas, describes Ether ETFs as turning Bitcoin into the “second best” crypto asset in July, awarding the category ETF of the Month after unprecedented investor interest.

On the technical front, traders point to Ether’s multi-year bullish pennant, a “sleeper setup” now nearing breakout territory.

According to prominent trader Merlijn, every dip has been met with smart money accumulation, with weak hands flushed out during prior consolidations.

ETH’s long-term projection envisions a pullback toward the $3,000–$3,500 range before ETH embarks on a rally past $8,000, marking what could be the beginning of a new chapter in Ether’s price history.

Related: Ethereum sets highest weekly close in 4 years: Watch these ETH price levels

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.