Ethereum (ETH) has traded sideways over the past two weeks, pausing near the $2,550 mark after a strong rally earlier this year. Despite this short-term consolidation, Polymarket traders and technical indicators signal a growing belief that the second-largest cryptocurrency may be gearing up for another major breakout in the coming weeks.
Ethereum’s 2025 Rally Remains Intact
After bottoming earlier this year, Ethereum has gained 85% from its lowest point, briefly touching $2,735 this month before pulling back slightly. As of Saturday, ETH was trading at $2,550, holding firm despite broader market volatility.
Polymarket data indicates that trader sentiment is turning bullish again. The odds of Ethereum reaching $4,000 by 2025 have jumped to 40%, up from just 16% last month marking the highest confidence level since March. Traders also place 25% odds on a $5,000 target, while only 16% believe ETH could fall to $1,000, a sharp drop in bearish sentiment.
On-Chain Metrics and ETF Flows Show Strength
Ethereum’s fundamentals are improving. According to Nansen, Ethereum has seen a 35% increase in transaction volume over the past 30 days, totaling 39 million transactions. The number of active addresses has also climbed slightly to 6.7 million, reinforcing steady on-chain activity.
In addition, the launch of spot Ethereum ETFs has started to pay off. These funds attracted over $238 million in inflows this week alone, pushing total ETF-linked ETH holdings to $2.76 billion. Leading the pack is BlackRock’s ETHA with $3.4 billion in assets, followed by Grayscale’s ETHE ($2.9B) and ETH ($1.28B).
Technical Indicators Signal More Gains Ahead
From a technical perspective, Ethereum is showing classic signs of a potential breakout:
- A golden cross was formed earlier this month as the 50-day and 200-day Arnaud Legoux Moving Averages crossed, typically a long-term bullish signal.
- The daily chart shows a bullish flag pattern, with the flagpole starting earlier this month and peaking at $2,736, near the 50% Fibonacci retracement level.
- Consolidation around current levels is part of the flag structure, often preceding another leg up.
If ETH breaks above $2,736, it could climb to the next retracement level at $3,052, and a continued rally could push it toward the $4,000 mark projected by Polymarket traders.
A Consolidation Phase Before the Next Surge?
While Ethereum’s rally has paused in recent days, the growing optimism among traders, rising ETF inflows, and positive on-chain activity all point toward renewed momentum. With technical patterns aligning and macro investor sentiment improving, Ethereum could be on track to retest key resistance levels and aim for $4,000 or beyond in the months ahead.
Investors now await a breakout above the $2,736 resistance, which could confirm the start of Ethereum’s next major bullish leg.
