Ethereum Holds Above $4,000 As Dencun Upgrade Begins! Will ETH Price Trigger A Correction?

Ethereum has managed to maintain its position above $4,000 after reaching its highest point in months. However, concerns are emerging about a potential correction in price due to the ongoing Dencun upgrade and various on-chain metrics indicating bearish sentiment. Recent ETH liquidation events and the increase in ETH entering exchanges suggest a possible retreat in price. The options market also shows a preference for put options, indicating a hedging strategy against potential price declines. QCP Capital has observed a decrease in ETH spot-forward spreads, suggesting that a drop in ETH spot prices could lead to liquidation of leveraged long positions. On the other hand, the Dencun upgrade brings significant enhancements to Ethereum, including reduced Layer 2 fees and improved scalability. Despite the cautious outlook, if any pullbacks occur, they are likely to attract further buying interest. The current price stands at $4,066, with potential resistance at $4,500 and a possible target of $4,900. The RSI level indicates overbought territory, signaling a need for caution, and a corrective phase could be triggered if the price falls below the 20-day EMA at $3,989.