Ethereum to Retest $3.5K as Bullish Sign Returns. After a steep drop, Ethereum is supported by a large area that encompasses the 100-day moving average and a critical price range between the 0.5 and 0.618 Fibonacci levels. In the medium term, a successful recovery is therefore anticipated.
Technical Analysis
The Daily Chart
A thorough examination of the daily chart reveals a protracted series of corrections retracements that ended with the price setting up a significant zone of support.
This range covers the 100-day moving average at $3050 and the wide range of prices between the 0.5 ($3190) and 0.618 ($2972) Fibonacci levels.
This range is significant because it generates a lot of demand, which could discourage Ethereum vendors from lowering prices even further. The price and RSI indicator have a modest positive divergence, which suggests that there may be a big rebound to retake the $3.5K barrier. Still, a sharp breach below this critical support zone would initiate events that would drive prices down to the $2.5K 200-day moving average.
The 4-Hour Chart
It is evident from a close inspection of the 4-hour chart that a falling wedge pattern developed during a multi-month consolidation correction. After a substantial decline, the price is close to the $3K support area and the lower limit of the wedge.
However, with the potential buying pressure in this crucial region, the price has entered a low-volatility consolidation phase.
This price change indicates a power struggle between suppliers and buyers. The price and the 4-hour RSI signal, which shows the strength of buyers, are diverging, suggesting. That there may be a positive upswing in the medium future. The price’s next target would be the critical resistance level at $3.5K in that case. However, a slide towards the $2.7K level is more plausible if a break is below this support.
Sentiment Analysis
It’s critical to ascertain whether the recent upswing in Ethereum’s price results from leveraged futures activity or spot buying. The funding rates are crucial for this analysis; positive numbers imply bullish enthusiasm. At the same time, negative values show market panic.
It is noteworthy that the financing rate indicator has followed the same trajectory. The recent decline in Ethereum’s price falls gradually until it approaches zero. This alignment implies that substantial holdings in the perpetual market have been liquidated due to the recent price decline, which has cooled the futures market. As a result, the market seems ready for long positions to reappear and perhaps even see another upswing.