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Notice the resurgence of interest in Ethereum following the presentation of ERC-8004, a new AI-focused standard that aims to give independent agents identity, reputation and on-chain verification. On the surface, it seems like this kind of innovation should boost morale. After this, the price of Ethereum increased by about 2.5% in the last 24 hours.
But the market reaction shows a different story. Despite the intervention of the main holders and the stability of the prices, the sentiment remains very depressing. The difference between structural progress and market confidence now constitutes the main tension defining Ethereum’s next move.
ERC-8004 price impact? Why Ethereum’s AI Update Can’t Spark a Rally Yet
The ERC-8004 standard was designed To support decentralized AI agents by providing on-chain identity, reputation history and verification. Basically, this standard helps machines to trust and transact with each other without the need for centralized platforms. This represents an important step for Ethereum’s long-term role in orchestrating artificial intelligence.
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But sentiment data show that the market is not reacting in the same way as it did with The last major update cycle for Ethereum.
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When the Pectra update went live on the mainnet in May 2025, Ethereum’s positive sentiment jumped sharply. On the day of the launch, the level of positive sentiment was around 259. In three days, it had risen to 610, an increase of almost 135%. This expansion of sentiment was preceded by a rally for Ethereum that lasted several months until the end of summer (August), where the price rose after sentiment subsequently reached annual highs near 749.
Note that the contrast today is clear. During the rollout of the ERC-8004 standard, Ethereum’s positive sentiment index was around 18, the lowest level over the past year. Compared to Pectra’s launch base of 259, current sentiment is down more than 90%.
The reason lies in the nature of the promotion. Pectra was a protocol-level improvement associated with scalability, efficiency and network fundamentals that directly impacted users and rates. ERC-8004, on the other hand, is more like an application level standard. It is structurally important, but its benefits are still in the early stages and have not been seen by most market participants.
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Simply put, ERC-8004 holds importance for the future of Ethereum. But the sentiment data clearly shows that the market has not yet made the future in prices.
Whales are piling in as RSI starts to recover – but the smart money remains cautious
While overall sentiment remains weak, the chain’s behavior shows varying levels of concentration. But first, you should look at the price card!
Technically, Ethereum recently showed a hidden bullish divergence between December 18 and January 25. The price made a higher low while the Relative Strength Index (RSI) recorded a lower low. The Relative Strength Index measures momentum. This pattern usually indicates a decrease in selling pressure, rather than the start of a full trend reversal. The subsequent bounce confirmed the stability and also avoided the collapse of the bear flag pattern.
Ethereum price now only needs to register a daily close above $3,160 to defeat the bearish pattern.
In agreement with this stability and the hope of reversing the downward trend, the major owners intervened. Ethereum whales increased their stake from 104.18 million eth to 104.61 million eth after the erc-8004 announcement. This represents an addition of about 430,000 eth. This equates – based on the average price – to about $1.3 billion in accumulation.
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This is not little money that reacts emotionally to the headlines. Investors sit here slowly and deliberately.
However, another indicator counterbalances the immediate bullish interpretation. The Smart Money Index, which tracks historically perfectly timed capital participation, remains below its signal line. In the previous sessions, the big demonstrations of Ethereum started only after this indicator crossed higher. The last clear break of the signal line was preceded by a rise of about 13%. This confirmation is still missing.
The collection of this data indicates a clear message. Whales accumulate in weak spots, most likely with the intention of long-term investment. The smart money has yet to start chasing momentum, which is consistent with weak sentiment. This reflects positioning, not speculation. This trend can keep the price impact of ERC-8004 low.
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Is The Double Bottom Pattern Setting The Ethereum Price Road To $4,000?
The larger price structure becomes clear only after understanding sentiment and positioning.
beincrypto reported that Ethereum recently avoided a drop, and is now forming a double bottom (W) pattern on a daily frame. This pattern reflects demand entering the same lows, creating the potential for a broader recovery if resistance levels are breached.
This model defines a clear hierarchy of levels.
The first resistance zone is located near $3,160. Above that, the crucial neck of the double model lies in the $3,390-$3,400 range. This level is important. A sustained break above will activate the pattern instead of just hinting at it.
If that neck is restored with confirmation, the structure opens the conditional targets near $3,790 and $4,170. A further extension towards $4,410 requires not only price strength, but also a tangible expansion in sentiment and smart money participation.
Without this confirmation, the model remains potential energy, not a stimulus. In a downtrend, a drop below $2,930 weakens the position. However, losing the $2,780 level will invalidate the double pattern and open the lowest price level for Ethereum.
