Decoding Ethereum’s $4,400 Test, Breakout Signal or Bear Trap?

Long-term indicators remain in favor of the bulls. For instance, the Exchange Supply Ratio (ESR) across all platforms has been declining steadily since 2022, reflecting weaker selling pressure and stronger accumulation trends.

However, Binance-specific data has flashed a short-term warning: its ESR has been rising since early 2025, accompanied by significant inflows – conditions often associated with selling readiness. This divergence between macro strength and short-term caution signals the potential for heightened volatility ahead.

Technical Picture: Breakout or Exhaustion?

On the daily chart, ETH is testing the $4,400 barrier while maintaining support near $4,000. The Relative Strength Index (RSI) currently sits at 71 – a level suggesting the market may have entered overbought territory. Fibonacci extensions highlight $4,302 as the immediate upside target, followed by $4,886 if momentum continues.

However, the elevated RSI also implies a higher probability of profit-taking, making it important for traders to watch for signs of market fatigue.

Recent futures volume data points to “overheating” as leveraged positions have surged in recent sessions. While leverage can accelerate bullish moves, it can just as easily trigger sharp liquidations if sentiment reverses. Historically, overheated derivatives markets near major resistance levels have often led to rapid pullbacks.

Whales Withdrawing ETH – A Sign of Accumulation?

Netflow data recorded $245.57 million in outflows on August 10, continuing a recent trend of sustained withdrawals from exchanges. This typically indicates investors moving assets to self-custody, aligning with accumulation behavior and reduced short-term selling pressure.

That said, positive ESR readings on Binance suggest that some traders are still moving ETH to centralized exchanges, potentially preparing to sell. This tug-of-war between accumulation and selling readiness is likely to keep the short-term outlook uncertain, even as the long-term trend remains favorable for further gains.