According to CryptoPotato, Ethereum's price is expected to rebound in the medium term after experiencing a significant downturn. The cryptocurrency has found support within a substantial zone, which includes the 100-day moving average and a critical price range between the 0.5 and 0.618 Fibonacci levels.
A detailed analysis of the daily chart reveals a prolonged period of corrective retracements, ending with the price finding support within a crucial zone. This zone includes the 100-day moving average at $3050 and the significant price range between the 0.5 ($3190) and 0.618 ($2972) Fibonacci levels. This range is significant as it draws considerable demand, potentially preventing further downward pressure from market sellers. A minor bullish divergence between the price and the RSI indicator suggests a potential for a bullish resurgence, aiming to reclaim the $3.5K threshold. However, an unexpected breach below this critical support zone could trigger a cascade effect toward the 200-day moving average at $2.5K.
A closer look at the 4-hour chart reveals a descending wedge pattern during a multi-month consolidation correction. After a significant decline, the price has reached the lower boundary of the wedge and the support region around $3K. Despite the potential buying pressure within this crucial range, the price has entered a consolidation phase characterized by minimal volatility. This price action indicates a struggle between buyers and sellers. However, a noticeable divergence between the price and the RSI indicator on the 4-hour timeframe suggests the strength of buyers, increasing the likelihood of a bullish upswing in the medium term. If this occurs, the next target for the price would be the critical resistance level at $3.5K. Conversely, a break below this support could lead to a descent toward the $2.7K support.
As Ethereum's price shows signs of recovery, it's essential to determine whether this resurgence stems from spot buying or leveraged futures activity. A key metric for this analysis is the funding rates, where positive values signify bullish sentiment and negative values indicate fear in the market. The recent downtrend in Ethereum's price has led to the liquidation of a significant number of positions in the perpetual market, resulting in a cooling effect on the futures market. As a result, the market appears ready for the re-emergence of long positions, with the potential for a fresh upward surge.
