Mike Smith
Aug 25
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On Sunday evening, ETH broke above $4,900, recording a new high near $4,946 and being in the price discovery zone for the first time since 2021. The previous record of $4.867 was left behind, the sideways has given way to momentum, and the line of the previous ceiling has turned into an area for which buyers and sellers are now fighting.
In price discovery mode, the chart is devoid of historical reference points - there are no layers of supply to check against. The further path is determined by psychology and the flow of bids: how quickly aggressive purchases absorb counter sales and how willingly long-term holders are ready to part with coins at new values. When the upper levels are not overgrown with positions, the momentum develops cleaner - a series of peak updates is often accompanied by acceleration.
In the background, leadership rotation has manifested itself. While BTC loses inertia after attempts to rewrite peaks, ETH retains relative strength and pulls capital behind it. This imbalance changes the behavior of participants: short-term traders switch to an asset with stronger momentum, and cautious entries feed the trend themselves.
A significant factor was the compression of liquid supply. The volume of coins available for quick sale is shrinking - more ETH is going into long-term storage and interest, and institutional demand is increasing competition for the remaining volume. In such a configuration, the buying wave causes a chain reaction - the price pulls sellers higher and higher, and slippage on thin sections adds speed to the movement.
But weekend rallies have a downside. When activity decreases and the order book thins, movements are easier to stretch than on weekdays. With the return of full liquidity, the market often tests the broken area for strength. A return to the breakout zone is not a signal of a broken pattern, but a working test of support.
Technically, the nearest trigger is the price holding above the former maximum and narrowing of volatility in the new corridor. The longer buyers defend the won territory, the less temptation long-term holders have to rush to fixation and the higher the chance to see the next upside wave. For sellers, the key to revenge is to drop the price below the recent ceiling and turn it back into resistance.
The focus now is on how the market will survive the first full trading day of the week. If buyers easily beat back the pullback to the breakout zone, confidence in the highs will strengthen and the supply shortage scenario will get new fuel. If the sellers' pressure brings the price back under the previous record, the dynamics will change and the bears will take the initiative.
