Ethereum has started 2026 by climbing back above the key $3,000 level, riding a broader crypto market rally. However, it is currently consolidating below a major resistance point at $3,400. Technical analyst Ali Martinez suggests that if the recent buying momentum continues, ETH could soon begin a new rally toward its all-time highs.
Potential for a Breakout
In a recent social media update, Martinez highlighted on-chain data indicating renewed bullish sentiment among Ethereum investors. The number of daily active addresses on the network has doubled in just two weeks, surpassing 800,000.
This surge in activity is potentially linked to growing demand for Ethereum ETFs. Since late December, these funds have accumulated roughly 158,545 ETH, worth about $520 million, further boosting the positive outlook.
This increased on-chain activity has established strong support levels between $2,772 and $3,109, which could help prevent significant declines. Martinez believes that if this support holds and buying pressure persists, a breakout above the $3,400 resistance could trigger a major rally toward $4,000—a gain of roughly 24% from the current price near $3,217.
The Road Ahead
Other analysts are also optimistic. BitBull analysts point to a potential inverse head and shoulders pattern forming on ETH’s chart, which could set a bullish price target of $5,000—a more than 55% increase that would surpass last year’s highs.
Despite these positive forecasts, Ethereum’s price has dipped by about 3% over the past day and has yet to show the sustained momentum needed to reach these targets.
Liquidity is another factor that could support upward movement. Market expert Ted Pillows recently observed that after ETH’s latest price drop, the market’s “maximum pain point” appears skewed to the upside. Historically, large players tend to target these liquidity levels, which can reset market positioning and shake out retail investors.
With roughly $3.4 billion in short positions at risk if Ethereum breaks above $3,400, the stage could be set for a significant price move in the coming days.
Frequently Asked Questions
Frequently Asked Questions Ethereums Potential Rally to 4000
BeginnerLevel Questions
Q1 What does it mean when experts say Ethereum could surge past 4000
A It means some analysts believe the price of one Ether coin could rise significantly from its current level to break through the 4000 price barrier based on their analysis of market trends and data
Q2 What are onchain signals
A Onchain signals are metrics derived directly from the Ethereum blockchains public data They include things like transaction volume the number of active wallets and where large holders are moving their funds Analysts use them to gauge network health and investor sentiment
Q3 Why is 4000 a significant price point for Ethereum
A Its a major psychological and technical resistance level Ethereum has struggled to hold above this price in the past so breaking and staying above it would be seen as a very strong bullish signal for the market
Q4 Is this a guarantee that Ethereums price will go up
A No it is not a guarantee Price predictions are based on analysis and probability not certainty Cryptocurrency markets are highly volatile and can be influenced by unexpected news regulations or broader economic factors
Q5 As a beginner whats the simplest thing I should look for
A For a simple start you could watch the overall trading volume and check if the price can consistently stay above previous resistance levels like 3500
Intermediate Advanced Questions
Q6 What specific onchain signals are experts highlighting for this potential rally
A Key signals often include
Declining Exchange Supply Less ETH held on exchanges suggests investors are moving coins to longterm storage reducing sell pressure
Network Growth An increasing number of new active addresses can indicate growing adoption
Supply in Profit A high percentage of ETH coins being held at a profit can signal strong holder conviction
Futures Market Sentiment Analysis of derivatives data to see if the market is leaning bullish or bearish
Q7 How does general crypto market sentiment affect Ethereums chance of hitting 4000
A Massively Ethereum rarely rallies in