Is ETH Ready to Challenge $3.5K and $4K After Recent Crash? (Ethereum Price Analysis)

Ethereum recently found stability in the $3,000 support region after facing substantial selling pressure, leading to a consolidation phase.

A golden cross on the daily chart further indicates the potential for a medium-term bullish rally, suggesting optimism in the market’s outlook.

Technical Analysis

By Shayan

The daily chart

Ethereum price action has been marked by increased volatility, especially after its rejection of the $4K resistance level. This drop pushed the asset below the crucial $3.5K threshold, eventually finding strong support in the $3K area. This level is of considerable importance due to the confluence of demand and the alignment of the 100-day and 200-day moving averages.

On the other hand, the appearance of a golden cross, where the 100-day MA has crossed above the 200-day MA, further emphasizes a potential shift to bullish sentiment. However, Ethereum remains bounded below the $3.5K resistance, requiring a decisive break to catalyze a new uptrend. A successful breach could set the stage for a renewed rally.

The 4 hour chart

In the 4-hour period, Ethereum’s decline from the ascending price channel culminated in a test of the $3,000 region. This zone is not only psychologically significant, but also aligns with the Fibonacci retracement levels of 0.5 ($3.2K) and 0.618 ($3K), reinforcing it as a strong support line.

Current price action suggests potential build-up of buying interest, with this region serving as a critical line of defense for the bulls. If this support holds, Ethereum is likely to start a new bullish move, with targets set to regain the $3.5k resistance. Conversely, a sudden break below the $3,000 threshold could trigger a cascade of liquidations, driving the price towards the $2,500 support, marking a deeper pullback.

Onchain analysis

By Shayan

After Ethereum’s significant correction to the $3,000 level, the futures market has begun a cooling period, raising expectations for a potential bullish rebound. The funding rates metric, a reliable indicator of futures market sentiment, provides valuable insight into this development.

Ethereum’s consolidation above the critical support level of $3,000 has allowed bullish participants to re-enter the market. This renewed demand is reflected in rising funding rates, indicating that more traders are opening long positions. This behavior often indicates growing confidence among market participants as they anticipate a reversal in the current trend.

The recent increase in financing rates suggests an influx of buyers that, if sustained, could lead to a substantial rally to the upside. This renewed buying pressure may push Ethereum towards the crucial $4K resistance in the short to medium term.

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