Ethereum (ETH) surged over 50% in July, reigniting market excitement with traders eyeing the $5,000 milestone. However, short-term indicators suggest potential turbulence before a projected rally to $4,500.
On-chain data reveals a concerning spike in the taker-sell ratio to 0.52 on July 28 — a level last seen in April when ETH plunged 11%. This aggressive selling, reflected in a -$231 million net taker volume imbalance, signals profit-taking and fear. Concurrently, exchange inflows hit a 7-day average of 43 ETH per key address, historically preceding 40–45% corrections.
External catalysts exacerbated pressures: President Trump’s July 31 tariffs triggered a market-wide sell-off, liquidating $115.8 million in ETH longs within five hours. Retail traders absorbed the brunt but subsequently bought the dip at $3,600 support, fueling a rebound to $3,858. The funding rate turned negative for the first time since June 25, potentially signaling a buy opportunity as shorts pay longs.
Despite these headwinds, technical structure remains bullish. ETH maintains higher highs/lows since June, with the Parabolic SAR indicator affirming upward momentum. Resistance looms at $3,900–$4,200; a breakout could propel ETH toward $4,500 — a critical barrier where 47% of addresses are in profit, risking sell-offs. Traders must monitor taker-sell ratios, exchange inflows, and the $3,530–$3,600 support zone. A brief 10–11% dip may precede the next rally leg.