In the past few days, Ethereum, the second-largest cryptocurrency by market cap, has been facing an uphill battle against aggressive sellers, primarily clustered around the crucial resistance region of the 100-day moving average. This pattern of price action indicates an increase in downward pressure and points towards a potential corrective consolidation in the near future.
Ethereum recently experienced a surge in selling activity at the $2.6K resistance area, which coincides with the 100-day moving average. This led to a rejection that pushed the asset towards the dynamic support located at the middle trendline of the channel, around the $2.3K mark. This indicates that the resistance zone is still a significant hurdle for potential buyers, at least in the mid-term.
At present, Ethereum is trading within a confined range between the middle support boundary of the channel and the 100-day moving average. If the price can successfully break above the 100-day moving average and confirm a pullback, we could see the start of a new uptrend. In such a scenario, the next targets for Ethereum would be the 200-day moving average at $2.9K and the upper boundary of the channel near $2.8K. However, if the selling pressure intensifies and Ethereum breaks below $2.3K, we may see the price revisit the $2.1K support level, potentially triggering further retracements.
On the 4-hour chart, Ethereum’s recent price surge was met with significant selling pressure around the resistance zone between the 0.5 and 0.618 Fibonacci levels ($2.6K-$2.8K). This zone has proven to be a strong barrier, indicating a concentration of supply. A shift towards a bullish trend will require confirmation of a breakout from this zone.
At the moment, Ethereum is hovering near the lower boundary of the flag at $2.4K. If it breaks below this support, it could trigger a cascade of liquidations, driving the price towards $2.1K. However, the more likely scenario is a consolidation phase around this support level, with a potential rebound towards the 0.5 Fibonacci level until a decisive breakout occurs.
Onchain data analysis reveals that Ethereum’s price has been consolidating within a narrow range, signaling a market indecision. However, insights from the futures market indicate that a breakout could lead to a significant liquidation event, which would likely amplify the prevailing trend.
Based on the current chart, liquidity is concentrated below the $2.4K level, suggesting this price range may be pivotal in the short term. The presence of significant liquidity pools below $2.4K indicates that a downward breakout could attract more sellers and prompt long buyers to close their positions, intensifying the bearish momentum.
This situation raises the possibility of a long squeeze, where a cascade of liquidations could drive Ethereum’s price down to the $2.1K support level. For sellers, the area below $2.4K is an attractive threshold for lowering prices. Conversely, for buyers, this represents a crucial line of defense. Their actions near this level will be critical for determining the broader market trend.
In conclusion, Ethereum’s price action near the $2.4K threshold will be decisive for the short-term trend. Any movement beyond this range could signal a more decisive directional shift.
