Ether's Value Assessment: Could a 'Vigorous' Adjustment Be Imminent for ETH?
Ethereum Struggles to Maintain Momentum above $2.7K Resistance
Ethereum, the second-largest cryptocurrency by market capitalization, has been grappling with resistance at the significant technical level of around $2,700 over the past week. This resistance has hindered the asset's progress, with the price forming a potential double-top pattern, a bearish reversal signal.
The double-top formation, coupled with the recent price action, indicates a potential corrective consolidation towards the $2.2K support threshold. This retracement phase could provide a healthy reset, attracting new demand at lower levels and establishing the necessary momentum for a fresh breakout above the resistance.
In the daily chart analysis, Ethereum has met with strong resistance at the 200-day moving average, indicating a significant seller presence at this level. The asset has lost upward momentum, and the double-top formation suggests increased profit-taking and distribution. This short-term correction could ultimately pave the way for a bullish breakout in the coming weeks.
On the 4- hour chart, Ethereum's weakening bullish momentum is reflected in its price action within an ascending wedge, a bearish reversal pattern. The wedge formation, along with a clear bearish divergence between the price and the RSI indicator, suggests that bearish forces may be gaining strength. A break below the wedge's lower boundary near $2.4K could signal a pullback towards the $2.2K level, while an unexpected breakout above the wedge could trigger a short squeeze, fueling a renewed rally.
From an on-chain perspective, Ethereum continues to face resistance, keeping investors on edge about the likelihood of a bullish breakout. The ETH Taker Buy-Sell Ratio, which measures aggressive market orders, has seen a marked decline recently, suggesting increased aggressive selling activity. This trend suggests that bears are regaining control, potentially trigging a wave of profit-taking and distribution as Ethereum struggles near resistance.
The outlook for Ethereum remains cautiously optimistic, with key factors that could dictate its next major move. Ethereum has reclaimed a historically bullish level around $2,600, which marks the mid-line of the Gaussian Channel on the 2-week chart. Maintaining this level is crucial for sustaining the near-term upside potential, with breaking above the channel upper band possibly paving the way toward ETH’s prior all-time highs near $4,100 by mid-2025. However, any negative Death Cross or failure to maintain above the mid-level could result in extended consolidation or correction towards support levels below $2,500.
In summary, Ethereum's price action suggests a potential short-term correction towards the $2.2K support level, followed by a possible bullish breakout in the coming weeks. The next major move will likely hinge on whether Ethereum can break above critical resistance bands, supported by favorable on-chain supply dynamics and broader altcoin market conditions influenced by Bitcoin dominance shifts.
- Technical analysis of Ethereum's price action on the daily chart has revealed a potential corrective consolidation towards the $2.2K support threshold due to the resistance at the 200-day moving average and the double-top formation, which indicates increased profit-taking and distribution.
- In the 4-hour chart, Ethereum's price is weakening within an ascending wedge, a bearish reversal pattern, and a clear divergence between the price and the RSI indicator suggests that bearish forces may be gaining strength, further indicating a potential pullback towards the $2.2K level.
- On-chain analysis indicates that bears are regaining control, as the ETH Taker Buy-Sell Ratio, which measures aggressive market orders, has seen a marked decline recently, suggesting increased aggressive selling activity, which could trigger a wave of profit-taking and distribution in Ethereum.
