Ethereum Could Potentially Rally Above $4,000 Amid Shrinking Supply and Strong ETF Demand

• Ethereum (ETH) is showing strong bullish momentum as shrinking liquid supply, sustained ETF inflows, and key technical indicators align to potentially push its price above $4,000.

• Recent data highlights record-high staking levels and accumulation addresses, signaling robust investor confidence and reduced selling pressure in the market.

• According to COINOTAG, “A decisive break above the $2,800 resistance could trigger a significant upward movement, potentially driving ETH toward cycle highs near $4,000.”

Ethereum’s price poised for a breakout above $4,000 amid strong ETF demand, record staking, and critical technical levels signaling bullish momentum.

Institutional Demand Fuels Ethereum’s Spot ETF Inflows and Price Strength

One of the primary drivers behind Ethereum’s recent price strength is the persistent inflow into spot ETH exchange-traded funds (ETFs), reflecting heightened institutional interest. Over the past two weeks, spot ETH ETFs have attracted net inflows exceeding $860 million, underscoring growing confidence from traditional finance sectors despite geopolitical uncertainties.

These inflows, the highest since early 2025, demonstrate a shift toward long-term investment strategies in Ethereum, as institutions seek exposure to its evolving ecosystem. The steady demand for spot ETFs not only supports price appreciation but also reduces available liquid supply, creating upward pressure on ETH’s market value.

ETF Inflows as a Barometer of Market Sentiment

Data from Farside Investors reveals that after a brief pause, spot ETH ETFs resumed inflows with over $19 million added in a single day recently. This trend highlights the resilience of institutional appetite for Ethereum, even amid broader market volatility. Analysts view these inflows as a critical sentiment indicator, suggesting that Ethereum is increasingly viewed as a core asset within diversified portfolios.

Record Staking and Accumulation Addresses Signal Strong Investor Conviction

Complementing ETF demand, Ethereum’s staking ecosystem is reaching unprecedented levels. More than 35 million ETH are currently staked, marking an all-time high that reflects growing trust in Ethereum’s proof-of-stake consensus mechanism and its long-term value proposition.

This surge in staked ETH reduces the liquid supply available for trading, which can amplify price gains when demand remains steady or increases. Additionally, accumulation addresses—wallets that have not sold any ETH—have climbed to a record 22.8 million ETH, indicating minimal selling pressure and strong holder conviction.

Implications of Staking and Accumulation Trends

OnChainSchool’s analysis emphasizes that these metrics collectively position Ethereum as one of the most fundamentally robust crypto assets. The combination of high staking levels and accumulation suggests a solid foundation for sustained price appreciation, as fewer tokens circulate freely in the market.

Technical Analysis: The Critical Role of the 200-Day SMA and Bull Flag Pattern

From a technical standpoint, Ethereum’s price is currently navigating a crucial juncture between the 50-day and 200-day simple moving averages (SMAs). The 200-day SMA near $2,600 serves as a significant resistance level that ETH must surpass to confirm a bullish trend reversal.

Historical data shows that breaking above this trendline has previously led to substantial rallies, including a 40% surge in late 2024. The presence of a bull flag pattern further supports the potential for a breakout, with price targets ranging from $3,900 to $4,200 if momentum sustains.

Chart Patterns Indicating Potential Breakout

Technical analysts highlight that ETH’s consolidation just below $2,800 is a compression phase often preceding strong directional moves. A confirmed close above this resistance could catalyze a rapid ascent toward the cycle highs, reinforcing the bullish thesis supported by fundamental factors.

Conclusion

Ethereum’s outlook remains optimistic as multiple converging factors—robust institutional ETF inflows, record staking and accumulation, and favorable technical setups—create a compelling case for a price rally beyond $4,000. Investors should monitor key resistance levels closely, particularly the 200-day SMA and $2,800 mark, to gauge the strength of this potential breakout. With strong fundamentals underpinning the market, Ethereum appears well-positioned for sustained growth in the near term.