Ethereum Nears $4K as $4B Supply Overhang Looms: Analysts Brace for Deeper Correction

Ethereum flirts with psychological resistance as massive supply pressure builds—traders eye potential downside.

The $4,000 Barrier

ETH approaches the key $4K level while facing a staggering $4 billion overhang from recent unlocks and whale movements. Market momentum stalls as institutional players hesitate at these levels.

Analyst Anxiety Peaks

Technical indicators flash warning signals as derivatives data shows increased put buying. The smart money isn't buying the breakout narrative—yet another case of 'number go up' theology meeting cold, hard supply mechanics.

Market Mechanics Exposed

Liquidity thins above $4,100 while support clusters form around $3,650. This isn't fear—it's simple math meeting leveraged speculation. Sometimes the market needs to remind crypto bros that gravity still exists, even in decentralized finance.

Institutional Investors Step in Despite Market Jitters

Despite retail pain, large institutional players appear to be buying the dip. Bitmine Immersion, the biggest publicly traded ETH holder, recently added 52,475 ETH, bringing its holdings to nearly $6.6 billion.

SharpLink followed suit, purchasing 143,593 ETH at $4,648, though its position is now underwater.

Blockchain trackers also flagged new inflows from FalconX-linked wallets worth over $38 million. This suggests that while short-term sentiment remains shaky, big-money investors continue to accumulate ETH, betting on its long-term value.

Market experts caution that ethereum may remain under pressure as macroeconomic uncertainty looms ahead of the U.S. Federal Reserve’s Jackson Hole meeting. Pessimistic tone from Fed Chair Jerome Powell could trigger further risk-off sentiment across crypto and equities.

On-chain activity has also weakened. Active Ethereum addresses have dropped nearly 28% in August, signaling waning retail participation. Network growth has slowed as well, raising questions about near-term demand.

Still, analysts see long-term upside once the market absorbs the $4B staking unlock. Some forecasts remain bullish, with Ethereum projected to reach between $6,000–$8,000 by year-end if institutional flows persist.

For now, however, the critical question remains: can ETH defend $4,000, or will supply pressure drag it into a deeper correction?

Cover image from ChatGPT, ETHUSD chart from Tradingview