According to CryptoPotato, Ethereum's price has struggled to break below the significant $3K support region, despite a recent bullish rebound driven by increased demand near this level. However, a substantial resistance region could potentially halt the current momentum. An analysis of the daily chart reveals that Ethereum sellers have been trying to push the price below the crucial $3K support region, which aligns with the 0.5 ($3133) and 0.618 ($2906) Fibonacci levels. Despite these attempts, Ethereum recently experienced a bullish rebound due to significant demand around this key threshold, reaching the upper boundary of a multi-month descending wedge and the crucial 100-day moving average at $3.2K.
A sudden breach of this critical resistance zone could trigger a surge, with the next target being the $3.4K resistance region. However, the $3.2K resistance region could potentially halt the upward momentum, as it includes a significant amount of supply. If a bearish rejection occurs, a plummet toward the wedge’s lower boundary becomes imminent.
A closer examination of the 4-hour chart reveals a multi-week range-bound phase, with Ethereum consolidating between the significant support at $2.9K and the critical resistance at $3.2K. Recently, the price saw a notable surge near the $2.9K threshold, retracing towards the wedge’s upper boundary, which corresponds to the $3.2K resistance region. This indicates a slight increase in market demand. If buyers successfully breach the wedge’s upper trendline at the $3.2K resistance level and the bullish momentum strengthens, a strong bullish trend could emerge in the mid-term. However, if buyers fail to push the price above this threshold, a reversal may occur, leading to the continuation of the current sideways range phase towards the $2.9K support.
Investors are closely watching futures market behavior to gauge potential sentiment shifts amid Ethereum’s recent sideways consolidation and uncertain price action. The Ethereum Open Interest metric, which measures the number of open perpetual futures contracts across various cryptocurrency exchanges, shows a significant surge following a short period of sideways consolidation, highlighting increased futures market activity and more aggressive long or short positions. Depending on the direction of these positions, this suggests a potential notable price move in the short term. If the funding rates metric also rises, the market could be set for renewed bullish trends in the mid-term. However, heightened volatility may accompany this activity, so traders should exercise caution.
