Ethereum has experienced a slight price recovery after holding near the $2,500 mark. Even though the general price trend appears bearish, there are indications of short-term movement that should be approached cautiously as significant resistance levels are present above.
Technical Analysis
Daily Overview
ETH is currently trading around $2,900 after finding support at $2,500. This level has shown robust support which triggered a minor rally, positioning the asset near a supply range close to $3,000. The Relative Strength Index (RSI) has rebounded from oversold positions, now resting around 36, suggesting a reduction in bearish momentum.
Despite this recovery, the price still lingers below the 200-day (Yellow) and 100-day (Blue) moving averages, which are acting as resistance barriers. To change the market direction to bullish, ETH must reclaim and hold above the $3,500 level. If it fails to do so, another decline could happen, possibly back to the $2,500 level or even the critical low of $2,100.
ETH Daily Chart
4-Hour Analysis
On the 4-hour chart, ETH has developed a bearish flag pattern just below the $3,000 resistance. Such formations typically indicate potential downside movements upon breakdown. The asset has struggled to breach the significant supply zone at $3,000, showing signs of stagnation as the RSI approaches neutrality.
If this flag breaks downward, targets could fall near the $2,600 to $2,500 demand range. However, a breakout beyond $3,000 with substantial volume could overturn the bearish flag and start a journey towards the $3,500 mark. Careful buying is crucial here due to the existing resistance.
ETH 4H Chart
Sentiment and Open Interest
The overall market sentiment reflects a decrease in open interest for Ethereum, which has fallen to around $16.9B. This decline, together with lower funding rates, implies that speculative positions are diminishing, indicating a shift toward a more neutral market state following forced liquidations.
The recent price upturn was not heavily leveraged, hinting at a healthier recovery. Nonetheless, the ongoing decrease in open interest shows reluctance from traders, coupled with a lack of confidence in this movement.
Until open interest and prices begin to rise again, caution will dominate trading sentiment. Many participants may remain cautious or reduce risk as they anticipate significant resistance.
