Ethereum has demonstrated a significant upward trend, successfully bouncing back from its key support level at $2.7K. However, multiple resistance points loom on the horizon, raising the likelihood of a temporary setback.

Technical Analysis

By Shayan

Daily Chart

Ethereum has confirmed a bullish reversal from the crucial $2.7K support, indicating renewed buying interest and a change in market conditions. Yet, as it approaches significant supply zones, it faces potential resistance. The first critical hurdle is the daily Fair Value Gap (FVG) ranging from $3,255 to $3,367, followed closely by a bearish order block in the range of $3,367 to $3,610. These areas could introduce new sell pressure and interrupt the current bullish momentum.

A decline from these levels is likely, which may lead to a retracement to the psychological threshold of $3K. Despite the current recovery’s strength, a full bullish trend will only materialize if the price can close above the 200-day moving average.

Daily Chart

4-Hour Chart

On a 4-hour basis, Ethereum’s climb is even more pronounced, breaking free from previous downtrends that posed significant resistance. This movement has cleared short-side liquidity and opened the door to further gains.

That said, the intensity of this upward movement suggests a possible pullback towards the $3K support zone before any continuation. The price is confined within the range of $3K and $3.6K, with further consolidation likely until a definitive breakout occurs.

4-Hour Chart

Sentiment Analysis

By Shayan The Spot Average Order Size metric for Ethereum shows a stark shift in market dynamics following recent volatility. Increased retail engagement was observed as prices dipped towards $2.7K, coinciding with a robust rebound. This uptick in smaller order sizes appears to be driven by buyers accumulating at these lower price points.

Historically, periods dominated by retail buying at local lows often precede another downward swing. Markets tend to return to these price points, fostering trepidation among latecomers and creating liquidity that larger players use to acquire positions at more advantageous prices. This pattern mirrors trends observed between March and May, where initial retail enthusiasm was met with an extended correction.

Given this context, Ethereum may still have the potential for another downturn, providing the market a chance to reset positions and build momentum for a more resilient and sustained upward trajectory.

Order Size Analysis

Disclaimer

Information provided herein reflects opinions expressed by the quoted authors and should not be interpreted as financial advice. Always conduct personal research before making investment decisions. Use the information presented at your own risk.