Ethereum Price Eyes $4,000 as Global M2 Expands and DXY Weakens

As crypto market faces corrections, Ethereum price appears poised for a strong rally due to key macroeconomic trends and technical signals. A weakening US Dollar Index (DXY) and rising Global M2 Money Supply support the likelihood of risk-on assets gaining momentum. Additionally, Ethereum’s price structure aligns with the Wyckoff Accumulation pattern, reinforcing expectations of a bullish reversal. Analysts suggest this setup could push ETH toward the $4,000 mark in the near term.

DXY Decline and Global M2 Surge: A Tailwind for Ethereum Price?

The U.S. Dollar Index (DXY), which measures the dollar’s strength against a basket of major currencies, dropped 3.90% since February 28, 2025. A weaker dollar typically boosts risk assets like cryptocurrencies as investors seek higher returns in alternative investments. So, investors can expect the declining dollar to boost Bitcoin and Ethereum prices higher.

Additionally, the global M2 money supply, which is a broad measure of money in circulation, including cash, checking deposits, and other liquid assets, has also risen by 1.87%, from $105.4 trillion to $107.4 trillion since mid-January 2025. This expansion in liquidity is a perfect combination that further pushes investors to seek higher returns in risk assets. History shows that similar conditions have driven crypto bull cycles in the past and could catalyze a rally for Bitcoin and Ethereum prices as well.

Crypto analyst Sam Mandal noted,

“Ethereum thrives in environments of loose monetary policy and increased liquidity. The combination of a declining DXY and a rallying global M2 money supply creates an ideal setup for Ethereum to capitalize on market momentum.”

Ethereum’s Wyckoff Accumulation Pattern: A Springboard to $4,000 and Beyond?

Adding to the macroeconomic bullish narrative is Ethereum price action forming a Wyckoff Accumulation pattern, as noted by prominent crypto analyst Louie. According to his recently shared post on X, ETH is in the “spring” phase, which is often followed by a bullish reversal if certain conditions are met. The spring phase is when price dips below key level, indicating a potential smart money accumulation.

In the post, Louie highlighted that if Ethereum price recovers above the key support level at $2,300, it could kickstart a bullish reversal. In such a case, ETH’s value could explode to the next key hurdle at $4,000. 

“Smart money thinks in terms of years, not weeks,” Louie wrote, emphasizing the long-term accumulation strategy at play. Depending on the momentum at $4,000, he hinted that bullish Ethereum price prediction could extend its rally to $5,000, driven by strong market sentiment and technical support.

Conclusion: Ethereum’s Bright Future Ahead

As of March 8, 2025, Ethereum appears primed for a significant price rally, driven by a weakening U.S. dollar, expanding global liquidity, and a textbook Wyckoff accumulation pattern. With the DXY down 3.90% since February 28 and global M2 money supply up 1.87% since January, the macroeconomic environment is highly favorable for risk assets like ETH. Combined with technical signals pointing to a recovery above $2,300 and a potential target of $4,000 or $5,000, Ethereum investors have reason to be optimistic.