ETH’s Path To $3000 Involves Holding That Critical Support (Ethereum Price Analysis)

Ethereum’s bullish momentum has weakened after breaching the average trendline of a multi-month descending channel, resulting in muted sideways price action.

This consolidation phase could lead to a pullback, potentially setting the stage for the next stage of the uptrend.

Technical Analysis

By Shayan

The daily chart

Ethereum saw a surge driven by increased buying activity in the perpetual and spot markets, breaking above the crucial $2.5K resistance level. This breakout indicates the intention of buyers to push ETH towards its annual high of $4,000, despite the bearish sentiment prevailing over the past few months.

Ethereum price is currently consolidating in a sideways pattern, hinting at a possible pullback to the recently broken trendline. If the price returns to the $2.5k level and finds strong support, it will likely conclude the pullback, positioning Ethereum for another push towards the upper limit of the channel, around the $3k mark.

The 4 hour chart

On the 4-hour chart, Ethereum’s bullish momentum stalled upon reaching the zone of significant resistance near the Fibonacci retracement level of 0.5 ($2.6K). This area features a supply zone that has consistently acted as a barrier for buyers targeting the $3,000 resistance level.

While ETH may face a period of sideways consolidation or corrective pullback in the short term, a resurgence of bullish momentum could lead to a break above this resistance zone. If this happens, a short squeeze event may occur leading to further price gains. However, for now, a consolidation phase is expected before Ethereum makes its next impulsive move.

Onchain analysis

By Shayan

The perpetual futures market plays an important role in driving overall price movements, so it is essential to gauge the sentiment of futures traders for clues about potential trends. This analysis focuses on the 30-day moving average of Ethereum funding rates, a key metric that provides insight into whether buyers or sellers are more aggressive in executing market orders in the futures market .

The 30-day moving average of ETH funding rates has recently shown a slight bullish shift after a prolonged decline. This change has coincided with a broader market rally and an increase in the price of ETH, suggesting a possible shift in general sentiment. The rise in funding rates indicates increased buying activity among futures traders, indicating that market participants may be turning more bullish.

For Ethereum to continue its recovery and target higher price levels, demand in the perpetual futures market must continue to increase in the coming weeks. A sustained upward trend in financing rates could lead to further price increases in the medium term. However, this bullish sentiment will need constant monitoring from buyers to maintain the momentum, as any significant reversal in funding rates could slow Ethereum price growth.

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