ETH Claims Crucial Resistance, How High Can It Go?

Following former President Trump’s election victory in 2024, the cryptocurrency market has seen a surge in optimism and buying interest.

Ethereum was no exception, as its price rose by 10% at one point, reaching the critical resistance level of $2.5 thousand. A sustained break above this threshold could further fuel the bullish momentum.

Technical Analysis

By Shayan

The daily chart

On the daily chart, Ethereum saw increased buying activity near the $2.3K support, which coincides with the average boundary of the multi-month descending channel. This buying pressure pushed the asset towards the 100-day moving average, aligning with the $2.5K resistance zone. This region has seen the presence of sellers in the past, suggesting that it is a significant barrier to ETH’s upward movement.

However, if the buying pressure continues, Ethereum could break this resistance, leading to a short squeeze and a continuation of the uptrend. In this bullish scenario, the 200-day MA at $2.8K, aligning with the upper boundary of the channel, would become the next target for buyers.

The 4 hour chart

The 4-hour chart highlights the initial rise above $2.3K, a support zone that marked the lower limit of a descending flag pattern. Concentrated buying pressure at this level has pushed Ethereum closer to decisive resistance between $2.6k and $2.8k, defined by Fibonacci levels from 0.5 to 0.618.

This area represents a substantial supply area and may lead to a short-term consolidation phase as ETH buyers face selling pressure.

For Ethereum to mark a confirmed uptrend, it would need a break above this resistance zone with strong volume, which could pave the way for an extended uptrend. Meanwhile, price action around this resistance level will be critical as it will determine whether Ethereum can build on its current momentum or faces a temporary pause in its bullish rally.

Onchain analysis

By Shayan

Ethereum’s recent surge towards the $2.5K resistance region has sparked optimism among investors, many of whom are anticipating the start of a new bullish surge. Key futures market indicators such as open interest and funding rate metrics provide insight into trader sentiment and participation levels.

The chart highlights that both open and funding interest rates have shown positive values ​​during this recent uptrend, reaching higher levels than in previous months. This increase indicates greater participation and generally bullish sentiment among futures traders. While strong participation is often essential to a sustained bull market, too much optimism in the futures market can also carry risks.

Currently, neither open interest rates nor funding rates have reached alarming levels, suggesting that there is still room for these metrics to rise without immediate risk. However, a sudden increase in these values ​​could introduce greater volatility and increase the risk of a long liquidation cascade, which could cause prices to fall rapidly.

Given these dynamics, investors may want to be cautious in the short term, closely monitoring these metrics and carefully managing risk levels to prepare for potential volatility.

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