ETH is flirting with $2.5K, but the bullish outlook remains questionable

Ethereum price has consolidated in a wide range above $2,000. However, things may change soon.

Technical Analysis

By Edris Derakhshi (TradingRage)

The daily chart

On the daily chart, the price has been moving sideways in a $500 range between the $2,700 resistance level and the $2,200 support zone.

With the market testing the upper limit several times and failing to break through, $2,200 seems likely to be targeted in the coming weeks. On the other hand, the RSI is approaching the 50% level from the bottom, which suggests that the bearish momentum is fading, which could also lead to a reversal soon.

Source: TradingView The 4-hour chart

The 4-hour chart paints a much more significant picture of the recent price consolidation. The market has been stuck in a large symmetrical triangle pattern and each limit has been tested twice.

However, with the $2,500 level broken to the downside and retested from below, the market will likely test the lower trendline soon.

Source: TradingView Sentiment Analysis

By Edris Derakhshi (TradingRage)

Ethereum open interest

This chart shows the open interest (OI) metric, which shows the total number of outstanding futures contracts. It reflects the level of trader participation and market activity, with rising OI indicating increased interest and falling OI suggesting traders are closing their positions or liquidating.

The chart shows that OI and Ethereum price move closely in tandem, with a significant increase from late 2023 to early 2024, indicating high market engagement and bullish sentiment.

However, the sharp decline in mid-2024 suggests a major bearish event or liquidation, which will cause traders to exit their positions, leading to reduced market activity and a fall in prices.

Despite some fluctuations, both OI and price remain below previous peaks, reflecting a more cautious sentiment among traders. However, with this cooling in the futures market, sufficient timely demand can start a sustainable recovery.

Source: CryptoQuant

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