Over the past few weeks, Ethereum (ETH) has shown a strong correlation with Bitcoin (BTC), with both major cryptocurrencies moving in tandem. This correlation suggests that if BTC's price continues its upward trend, ETH will likely follow suit. Analysts are speculating that a rally pushing BTC above $120,000 could be the catalyst that sends ETH soaring past $4,000 and potentially even higher. The recent price correction in ETH was not as severe as some expected, indicating that holders remain optimistic about its long-term potential. While ETH did dip to $3,507 early in the week, a resurgence in demand pushed it back above $3,700.
Despite a recent slowdown in bullish momentum, market data suggests that "smart money" is still actively accumulating Ethereum. According to Glassnode, the number of addresses holding more than 10,000 ETH has drastically increased since mid-July, growing by 50 addresses in the last 30 days. This increase indicates that the top 1% of ETH holders are adding to their positions.
This whale accumulation is supported by strong institutional interest. Ethereum spot ETFs have just completed another week of sustained inflows, with institutions injecting over $1.8 billion in liquidity. These continuous inflows from institutions, combined with the accumulation by large holders, likely helped prevent a more significant price drop for ETH. This conviction from institutional investors reinforces the belief that ETH has strong potential to push well above $4,000.
When analyzing the long-term price action, ETH appears to be trading within a large wedge or triangle pattern. The latest price surge is positioning ETH for another retest of the descending resistance line, potentially near the $3,900 mark. The recent surge in whale activity makes a retest highly probable by the end of July.
A successful breakout from this pattern would confirm ETH's bullish momentum and could lead to a massive liquidation event for bearish traders, paving the way for new all-time highs. However, a strong wave of selling pressure could cause a retracement, making the supply and demand dynamics in the final week of July critical.
A significant external factor to consider is the looming "tariff war 2.0," slated to begin in the first week of August. The last time such a tariff war broke out, it led to heavy outflows from cryptocurrencies. This event could impact liquidity and influence ETH's price action in the coming weeks, making the final week of July a crucial period for the cryptocurrency's immediate future.
July 2025, Cryptoniteuae