Ethereum Price Forecast: Can ETH-USD Break $5,000 as Supply Tightens?

Ethereum (ETH-USD) Price at a Crossroads: Rally Toward $5,000 or Cooling Phase?

Ethereum (ETH-USD) is trading around $4,655, up more than 9% this week, placing it squarely inside a critical resistance band. The move follows weeks of choppy consolidation, and the market is now split on whether ETH can finally retest and break its prior high near $4,957 or stall and fall back toward the mid-range supports. The weekly surge has been driven by a mix of technical catalysts, renewed institutional demand, and aggressive liquidation of leveraged shorts. With Bitcoin (BTC-USD) holding above $115,000, ETH is benefiting from broader risk appetite, but the question remains whether momentum is strong enough to carry it to the long-awaited $5,000 milestone.

Technical Setup Reinforces the Bullish Case

On the daily chart, ETH continues to climb within an established ascending channel. The latest leg higher carried price into the $4,700–$4,800 zone, a supply cluster that has repeatedly capped rallies. Its overlap with the channel top makes this resistance one of the most consequential levels of the year. A confirmed daily close above $4,800 would dramatically increase the probability of a breakout attempt toward $5,000, while failure here would likely drag ETH back into the $4,400–$4,200 area. On shorter time frames, the 4-hour chart shows ETH broke cleanly from a wedge pattern, surging directly into overhead resistance. Momentum indicators remain constructive—RSI is near 67, elevated but not extreme, while widening Bollinger Bands suggest heightened volatility ahead.

Liquidity Dynamics and the Short Squeeze Catalyst

Ethereum’s recent push higher was amplified by a large-scale short squeeze. Once ETH cleared local highs, leveraged positions were force-liquidated, driving rapid upside momentum. This flush of sellers cleared out liquidity above resistance but left behind a dense demand pool in the $4,400–$4,500 band. That zone has now become critical: if ETH fails to sustain pressure at $4,700+, traders should expect price to gravitate back to this liquidity pocket before any fresh breakout can be attempted. Derivatives data confirm this inflection: more than $1.59 billion in shorts sit vulnerable if ETH breaks $4,550 decisively, while a drop below $4,350 would put over $1 billion in long positions at risk.

Institutional Flows and ETF Impact

The fundamental driver of Ethereum’s resilience is the revival of institutional demand. Spot ETH ETFs, which had posted outflows exceeding $780 million the prior week, reversed course with $638 million in net inflows between September 8–12. That marked the strongest inflow streak in months, signaling that institutional allocators are again rotating capital into Ethereum. Beyond ETFs, corporate treasuries are beginning to adopt ETH as a reserve asset, with firms like SharpLink holding nearly 837,000 ETH, valued at over $3.7 billion. Such accumulation reduces circulating supply on exchanges, tightening liquidity and reinforcing the bullish supply-demand imbalance.

Supply on Exchanges Hits YTD Low

On-chain metrics confirm the tightening backdrop. The Ethereum Exchange Supply Ratio (ESR) has dropped to 0.14, the lowest level of 2025. This metric tracks the proportion of circulating ETH held on centralized exchanges; declines signal coins moving into long-term storage or custody, reducing near-term selling pressure. Historically, similar drops have preceded major rallies, as was the case in November 2024, when a golden cross combined with shrinking exchange balances sparked a surge from $1,800 to $3,400 in just weeks. The same pattern repeated in December when ETH vaulted above $4,000. With today’s ESR decline coinciding with renewed ETF inflows and whale accumulation, conditions appear ripe for another large-scale breakout.

Golden Cross Strengthens the Trend

Ethereum has also flashed another golden cross—its 50-day moving average crossing above the 200-day. In prior cycles, this signal marked the beginning of durable bull phases. The November 2024 golden cross preceded a near-doubling in ETH’s price, while December’s crossover laid the foundation for the climb above $4,000. In 2025, the signal appears again, this time confirmed by rising trading volumes and stronger ETH/BTC ratios, suggesting ETH is gaining relative strength against Bitcoin. While not an infallible signal, the combination of technicals, ETF flows, and shrinking exchange supply makes the setup far more compelling.

Key Levels to Watch

Support is firmly established at $4,664, the level ETH reclaimed during its most recent push. A failure here would expose downside toward $4,387 and then $4,200, both of which align with structural supports and liquidity pools. On the upside, resistance remains at $4,797—a Fib retracement level—followed by $4,950, a psychological barrier just shy of the prior all-time high. A sustained breakout above $4,950 would almost certainly trigger momentum traders to chase price, opening the path toward $5,200–$5,400 in the short term.

Buy, Sell, or Hold Verdict

With ETH trading at $4,655, backed by declining exchange supply, surging ETF inflows, and the confirmation of a golden cross, the risk-reward tilts bullish. The decisive line in the sand is $4,664 support—as long as ETH holds above it, buyers maintain control. Breakout potential above $4,800 could catalyze a run to $5,000 and beyond, while downside risk is limited to the $4,200 zone where deep demand persists. Given the technical setup, institutional flows, and macro alignment, Ethereum (ETH-USD) earns a Buy rating, with near-term targets at $4,950 and a medium-term stretch goal above $5,200.

That's TradingNEWS