Ethereum Price Surges Back to $3,200: Is Greater Volatility Coming?

Question

## Macro Background: Liquidity Wave Hits the MarketThe U.S. Treasury just repurchased $12.5 billion of its own debt—a historic high.Why this matters:* Debt repurchase = liquidity support* Liquidity support = risk assets rally* Risk assets rally = crypto reboundThis liquidity injection comes on the heels of:* Expectations of Quantitative Easing (QE) returning* Market pricing in rate cuts* Inflows of capital supporting the bond market* Global central banks (including Japan) launching competitive stimulus measuresThe only risk factor—the Bank of Japan potentially raising rates—has been offset by Japan's simultaneous announcement of a $185 billion stimulus package.All of this sets a bullish tone for Q1-Q2 2026, and crypto has already started to react.## Ethereum Price Analysis: Strong Rebound from SupportEthereum has bounced cleanly from the key support area around $2,730, forming a strong V-shaped recovery.![ETHUSD_2025-12-04_09-33-10.png][image]https://img-cdn.gateio.im/social/moments-b72f9e9b6d-4ab315063d-153d09-6d5686() Key chart observations:(# 1. ETH breaks back above $3,200 resistanceETH is now consolidating at this level—a strong sign that buyers are defending the breakout rather than taking profits.)# 2. Momentum cooling, but still bullishStochastic RSI shows a pullback from overbought conditions, which typically occurs after a strong move up. This isn't bearish—it often precedes the next wave.(# 3. Structure remains strongly bullish* Higher lows* Higher highs* Cleanly reclaiming major moving averages* Strong correlation with BTC's upward momentumThe $3,200 level is now the key area to watch.## Ethereum Price Prediction: What’s Next?) Upside targets (bullish scenario)As liquidity expands and BTC holds above $90,000:**1. $3,350—minor resistance:** If BTC remains stable, a retest of this area is highly likely.**2. $3,500—primary target:** This is the next major resistance level on the chart—previously marked as a local high. A break above $3,500 opens the door to the following target:**3. $3,800—extension target:** This would require strong BTC momentum and continued liquidity inflows.### Downside targets (if the market pulls back)If ETH loses the $3,200 area:**1. $3,050—local support:** Could be tested if momentum cools.**2. $2,900—strong support:** Level where buyers previously stepped in aggressively.**3. $2,730—major support area:** This is ETH’s resilience line—losing it would weaken the trend.Currently, **none of these downside levels are under threat.**## How Bitcoin’s Return Above $90,000 Boosted ETHEthereum often performs strongly after Bitcoin stabilizes from a pullback. In the past 48 hours:* Bitcoin reclaimed $90,000* Market fear subsided* Liquidity injection from the U.S. Treasury boosted confidence* Risk assets in stocks and crypto reboundedWith BTC regaining dominance and momentum, ETH traders have re-entered the market.Historically:**BTC stability + macro liquidity = ETH acceleration**That’s exactly what we’re seeing now.