Ethereum News Today: Ethereum Faces $4,000 Test as DeFi Growth Competes with Market Volatility

Ethereum (ETH) is at a pivotal point as it consolidates around $3,896, with both analysts and traders monitoring crucial support and resistance zones that could shape its upcoming trend. The cryptocurrency has found stability between $3,700 and $4,000, buoyed by increased network usage and a resurgence in decentralized finance (DeFi) activity. Daily transactions on the

network consistently exceed 1.2 million, and the total value locked (TVL) in DeFi protocols has climbed 8% over the past week, indicating heightened user participation even as broader economic uncertainty persists, according to an .

ETH’s immediate challenge is to break above the $4,400–$4,500 range. Should this resistance be surpassed, analysts believe the token could advance toward $4,800–$5,000 before the year concludes. This projection relies on ongoing demand, which is being strengthened by Layer-2 scaling advancements and Ethereum’s deflationary features, such as an increasing burn rate that cuts net supply, as highlighted in the analysis. On the other hand, if ETH falls below $3,700, it may retreat to the $3,300–$3,400 area, especially if DeFi momentum slows or overall market sentiment weakens, the report cautioned.

Technical signals present a mixed scenario. Ethereum’s price is forming a triangle pattern, with buyers holding the $3,800 support and sellers challenging resistance near $4,137. A daily close above $4,137 would indicate a breakout, potentially aiming for $4,495 or $4,950 in the near future, according to an

. Meanwhile, blockchain data shows a spike in large trades: one trader, known as "0xc2a," recently earned $17 million by betting on an ETH rebound and , amassing over $296 million in long positions, as described in a .

Global investment trends add another layer of complexity to market sentiment. As noted in a

, crypto exchange-traded products (ETPs) experienced $513 million in net outflows last week, led by withdrawals from Bitcoin-focused funds. In contrast, Ethereum investors took advantage of the dip, pouring $205 million into ETH-related products, demonstrating faith in the asset’s medium-term outlook. This contrast underscores Ethereum’s distinct role as an innovation hub, with DeFi and blockchain infrastructure fueling demand even amid wider market uncertainty.

Looking further ahead, Ethereum’s outlook remains optimistic. The network’s fundamentals are strong, with product revenue from Ethereum-based cloud services growing at an annualized rate of 32% and Layer-2 adoption expanding, highlighting its durability. Analysts from Bernstein and Bank of America, though primarily equity-focused, have pointed out Ethereum’s core strengths, including its foundational role in new DeFi models, as mentioned in an

.