• Ethereum trades near $4,200 support after failing to break above its all-time high close to $4,900.
• On-chain metrics surged in August with $135 billion DEX volume, $240 billion TVL, 48M transactions, and 15 million active addresses.
• Whale inflows over $4.5 billion signal strong confidence, but key levels $4,200 and $4,800 would decide Ethereum’s path.

Ethereum struggles to keep gaining momentum after its inability to punch its all-time high close to $4,900. The price has backed up that level and fallen below several key supports.

Now, traders are wondering whether Ethereum would be able to hold out for a longer-term bullish structure or if it could potentially drop into deeper correction territory. The direction might be determined by the next few sessions.

Crypto Patel noted that Ethereum posted a record August across a variety of on-chain metrics. Decentralized exchange volume hit $135 billion. Total asset value locked (TAVL) increased slightly over $240 billion. The network processed more than 48 million transactions.

Active address grew to 15 million addresses. Patel emphasized this resurgence came after months of breathing room despite consistent Ethereum market inflows into ETFs.

Whale Inflows Drive Ethereum Toward $4,200 Test

Significant attention has also been given to whale activity. Blockchain analytics provider Arkham Intelligence reported that an individual moved more than $1.1 billion of Bitcoin into Ethereum last week.

Just days prior, this same address had converted almost $2.5B worth into ETH. In total, the wallet moved over $4.5B in the space of just a few weeks. Analysts interpret these flows as renewed confidence in Ethereum.

On a daily chart, ETH is still trading inside of an ascending channel. Momentum has slowed since this rejections at the top of the channel. Price has since pulled back to support at the midline at $4,200. This level has been a firm demand zone in recent months and is an important line in determining whether the overall bull trend becomes broken or not.

Also Read: $5 Billion in Ethereum Shorts Face Liquidation Risk if ETH Hits $5,500

Technical indicators indicate the intensity of cooling. The relative strength index has moved down towards 52. This is a break-even between buyers and sellers after weeks of bullish bias. As analysts further point out, if Ethereum dives to support levels at $4,200, the price could tumble to $3,800. The area coincides with previous consolidation levels and owns an area of sell-side liquidity.

Key Battle Between $3,800 and $4,800

If buyers could hold the $4,200 zone, ETH could stabilize before trying again towards the upside. The second important resistance is around $4,800. The result is that analysts point to a strong liquidity cluster between $4,800 and $5,000, where many shorts have been left behind. A move into this zone would probably lead to liquidations, which would add additional momentum upward.

On the flipside, there seems to be a concentration of large, long liquidations in the $3,800 to $4,200 range. If selling dominates, the price could be drawn toward those areas on the downside.

Such an advance could potentially extend another deeper correction and tarnish the bullish senior conviction in the near term. Traders are closely watching these liquidity zones for direction.

For the time being, ETH would probably stay in a range-bound and liquidity-driven environment. A breakout above $4,600 may set the stage for a move toward $4,800 and potentially $5,000.

Ethereum is at a critical junction. Network data and increasing inflows onto the whale show that it’s getting stronger. Yet technical charts depict weakness after a rejection from near all-time highs. Whether ETH continues its rally or plunges deeper into correction, the balance between liquidity and market sentiment will dictate the course of action.

Also Read: Ethereum Outlook Shows Whale Activity Near Crucial $4,000 Support Level