Ethereum Weekly Outlook: Wall Street Calm, Gold Pullback Lift ETH’s Recovery Potential

Ethereum’s native token, Ether (ETH), enters the new week with a cautiously bullish outlook, having risen by over 13% from the Oct. 9 crypto market rout but still down by over 20% from its record high at around $4,950, established in August.

Wall Street Data Hints at Mild ETH Recovery This Week

The broader risk environment looks more constructive: the VIX—Wall Street’s “fear gauge”—has reversed sharply from its weekly high near 29 to around 20, signaling easing investor anxiety.

Gold’s correction from record highs also bodes well for risk assets.

The metal’s 1.65% drop suggests a short-term rotation away from safe havens, a setup that often channels liquidity back into assets like Bitcoin and Ethereum.

However, the outlook remains moderately bullish, not euphoric. Persistent volatility, potential credit-market stress, or a new wave of macro shocks—particularly trade tensions—could still weigh on crypto sentiment, impacting Ether bulls.

ETH Eyes $4,000 Amid Channel Support Test

Ethereum rebounded sharply this week after testing the lower boundary of its descending parallel channel near $3,800, a structure that resembles a classic bull flag.

The bounce signals buyers are defending this zone as a short-term accumulation area, with the 200-day exponential moving average (200-day EMA; the blue wave) at $3,558 reinforcing technical support.

The recovery has pushed ETH toward the $4,000–$4,200 zone, coinciding with the 0.382–0.5 Fibonacci retracement levels and the channel’s midline resistance.

A decisive close above this region could confirm a bullish breakout from the flag pattern, setting up a potential retest of $4,380–$4,600 in the coming sessions.

Conversely, failure to sustain above $4,000 may result in renewed selling pressure, keeping ETH trapped within the descending channel until broader risk sentiment improves.

Over $400 Million Shorts at Risk if ETH Hits $4,000

Ethereum’s climb toward the $4,000 resistance zone could trigger a significant wave of liquidations in the derivatives market.

According to CoinGlass data, over $400 million in short positions are clustered between the $3,950 and $4,100 levels, the area that aligns with Ethereum’s channel midline resistance seen on the daily chart.

If ETH breaks above this range, it could spark a short squeeze, forcing over-leveraged traders to cover positions and accelerating price momentum toward $4,200–$4,400.

Conversely, the same liquidation heatmap shows lighter liquidation density below $3,700, suggesting downside risks may be more gradual unless fresh leverage builds up.