Amid the market corrections, Ethereum (ETH) has retested a key multi-year support level, suggesting that a bounce to $4,000 could be near. However, some market watchers noted that ETH has tapped an “interesting level” against Bitcoin, which could signal the time to celebrate is not here yet.

Ethereum Holds Key Support Level

Over a week ago, the crypto market saw its biggest retrace in months, sending Bitcoin and most cryptocurrencies to monthly lows. Ethereum dropped to $2,120, hitting its lowest price range since the early August correction.

Since then, ETH has moved within the $2,600-$2,830 price range, struggling to turn the range’s upper level into support for the past week. Yesterday’s market pullback, seemingly fueled by Donald Trump’s latest tariffs on steel and aluminum, saw Ethereum drop below the $2,600 support, a key resistance level before the Q3 2024 breakout.

On Monday, the King of Altcoin reclaimed the recently lost support, trading above the $2,650 mark throughout the morning. Some market watchers noted that ETH remains in its “bounce or die” multi-year support.

Ethereum has been in an uptrend support since 2022, retesting this trendline four times before. Each retest has been followed by a rebound to a key horizontal level in the following weeks.

ETH faced resistance at the $1,900-$2,200 zone during the 2022 retests of the ascending trendline before breaking out. Meanwhile, the 2023 and 2024 rebounds saw ETH bounce from the uptrend support to face resistance at the $4,000-$4,100 levels.

Market observer and investor Ted Pillows noted that Ethereum held its uptrend support since May 2023 after the recent retest, which could indicate that a rebound is near. If the pattern repeats, the cryptocurrency could break past the $4,100 resistance level and aim for new highs soon.

ETH Price Action Resembles 2020-2021 Rally

Ted also pointed out that ETH’s recent “capitulation candle” looked like March 2020’s. He explained that Ethereum recorded a major dump that led investors to believe the altcoin’s rally was over.

However, the cryptocurrency bounced back, resulting in a “long-term structure breakout for Ethereum.” According to analyst Crypto Jelle, ETH currently trades in a multi-year ascending triangle, and the recent performance suggests that the next move “will be the real deal.”

He noted that Ethereum’s next attempt would be the fourth retest of the $4,000 mark this cycle, which could “be the charm” as the resistance level weakens. A breakout and reclaim of this key resistance would potentially lead to a retest of the $4,878 all-time high (ATH).

Daan Crypto Trades highlighted that the ETH/BTC trading pair moved back to its 2016-2020 levels when it hovered between 0.023-0.036. The range’s upper zone served as a key resistance throughout these years, propelling ETH to ATH and local highs against BTC once turned into support.

The trader considers that ETH/BTC could sit within this level “for quite a while” and that “the time to get excited again is when this retakes 0.036 at the very minimum.”

As of this writing, Ethereum trades at $2,659, a 1.2% increase in the daily timeframe.

Elon Musk’s company Tesla made a killing with Bitcoin, pulling in a $600 million profit in the fourth quarter of 2024 without even adding to its stash thanks to Bitcoin’s rally past $109,000. The company still holds 11,509 BTC, as confirmed in Tesla’s SEC filing released Monday.

Arkham Intelligence data shows that Tesla’s Bitcoins are now worth $1.1 billion, a far cry from its $38,000-per-coin average purchase price when Tesla originally bought $1.5 billion worth of Bitcoin in 2021, snagging 39,474 Bitcoins, though it ended up selling more than 70% of that pile in 2022.

FASB’s new accounting rules flipped the script on crypto profits

Tesla’s record-breaking Bitcoin gain is tied to new accounting standards. The Financial Accounting Standards Board (FASB) introduced fair-value accounting rules in December 2024, and that changed everything.

Under the old rules, companies had to report crypto at the lowest value during the accounting period, meaning if Bitcoin prices dropped, companies had to record losses on paper, even if they didn’t sell.

The new system lets companies report their Bitcoin holdings at real market value instead of historical lows. No more waiting until assets are sold to record gains. The SEC filing said:

“Other income (expense), net, changed favorably by $523 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily due to remeasurement of our bitcoin digital assets to fair value in 2024, partially offset by unfavorable fluctuations in foreign currency exchange rates on our intercompany balances. As our intercompany balances are significant in nature and we do not typically hedge foreign currency risk, we can experience significant fluctuations in foreign currency exchange rate gains and losses from period to period.”

The FASB rules aren’t optional, no. Any company holding crypto in the U.S. must follow them starting with fiscal years after December 15, 2024.

The standards only apply to fungible crypto assets like Bitcoin—meaning assets that are identical and interchangeable. NFTs, wrapped tokens, and internally created digital assets are excluded. According to the rules, eligible assets must be intangible, secured by cryptography, and live on a distributed ledger like a blockchain.

Meanwhile, as Cryptopolitan reported in December, Elon is still yet to make good on his promise of bringing back Bitcoin payments to Tesla, which he said he was gonna do whenever its green energy usage surpasses 50%. As of press time, it has hit over 57%, but still, nothing from the Doge Master.

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