Ethereum ( ETH ) price prediction: stablecoin liquidity surged to a new high of 171 billion USD, possibly challenging the 5500 USD target.

Despite prices consolidating below the key resistance level, the market fundamentals for Ethereum (ETH) are becoming increasingly strong. On-chain data shows that stablecoin liquidity on its network has surged to a record $171 billion, alongside outflows from exchanges and solid technical support. These positive signals, combined with expectations of a rate cut by the Fed, have led analysts to maintain an optimistic outlook for Ethereum's price to break through $5,500, making it one of the most closely followed assets in the market this week.

Ethereum Price Consolidation and Market Background

Currently, Ethereum (ETH) is trading around $4,605, consolidating below the key resistance zone of $4,638 to $4,665. Buyers have actively defended the range of $4,520 to $4,547, where the short-term exponential moving averages (EMAs) provide critical support. Despite the generally cautious market sentiment ahead of the Fed's policy decision, this resilience has kept Ethereum's price trend constructive.

This week, the market generally expects the Fed to cut interest rates by 25 basis points, and historical data indicates that Ethereum may benefit from this. Since 2022, after similar rate cut measures, ETH has averaged a 12% increase, which further enhances market expectations for a price breakout.

Technical Analysis: Key Levels and Bullish Signals

(Source: TradingView)

Market analyst @crypto_goos pointed out in a post on X that the Ethereum chart shows it has broken through a descending triangle pattern, which is typically seen as a bullish signal. Based on this prediction, the price of Ethereum is expected to reach $5,500, a level that has not been reached since the previous market peak.

Another analyst @LaCryptoMonkey emphasized that $4,770 is a dynamic support level derived from the August consolidation low. "Delaying entry until that area is confirmed could provide an ideal rebound opportunity," the post suggested. These technical views are consistent with on-chain signals, which indicate that despite recent volatility, strong accumulation is still ongoing.

Stablecoin liquidity surged to 171 billion USD

In addition to the technical aspects, Ethereum's role in decentralized finance (DeFi) is continuously expanding. According to data shared by Francesco Andreoli, the circulation of stablecoins on the Ethereum mainnet and Layer 2 networks has surpassed $171 billion, setting a new historical high. The Ethereum mainnet alone accounts for $152.8 billion, a year-on-year increase of 78%, highlighting its dominant position as a center for stablecoin liquidity. Layer 2 networks are also gaining attention, with Arbitrum holding $8.8 billion and Base reaching $3.9 billion. Emerging solutions like Mantle and Linea have also achieved triple-digit growth, indicating that their adoption in the expanding ecosystem is accelerating.

The surge in liquidity of stablecoins has strengthened Ethereum's position as a settlement layer for stablecoins and DeFi transactions, enhancing investor confidence in ETH as a core asset.

Conclusion

The recent trend of Ethereum prices is the result of the combined effects of favorable fundamentals and technicals. On one hand, record stablecoin liquidity has solidified its leadership position as the DeFi infrastructure; on the other hand, the bullish signals from the technical charts and macro favorable conditions provide catalysts for price increases. The current challenge facing Ethereum is to break through the current resistance level, which is not only a technical battle but also a test of market sentiment. If it can successfully break through and hold, it will not only validate the bulls' predictions but may also kick off a sprint toward higher price levels, even reaching the new milestone of 5,500 dollars.