Ethereum Price – Ethereum Faces Critical Resistance After Strong Rebound from $2.1K Support

Ethereum Price – After 37% Drop, Ethereum Poised for Another Surge or Deeper Decline?

Ethereum Price – Ethereum recently experienced a sharp 37% decline, which triggered significant buying activity near the $2.1K support region. This influx of demand led to a bullish rebound, signaling strong investor confidence at lower price levels. The current price action, however, suggests that Ethereum may be approaching a critical juncture, with the possibility of a pullback to the wedge’s lower boundary at $2.8K, potentially marking a continuation of the bearish trend.

Daily Chart Analysis: Bullish Rebound and Looming Resistance

A detailed analysis of Ethereum’s daily chart reveals a robust bullish response near the crucial $2.1K support level. This surge highlights the presence of substantial demand around the $2K region, as investors appear confident in Ethereum’s long-term potential. Despite this bullish momentum, Ethereum is now encountering a significant resistance level, marked by the previously broken lower boundary of the wedge and the key $2.8K threshold.

This resistance zone could potentially halt the upward momentum, triggering a reversal and marking a valid pullback to the previously broken level. If this reversal occurs, Ethereum’s next target would likely be the psychologically significant $2K support level.

4-Hour Chart Analysis: Key Resistance Levels

On the 4-hour chart, Ethereum shows signs of revival near the $2K support level, leading to minor corrective retracements. However, the price has now reached a critical resistance zone, defined by the 0.5 and 0.618 Fibonacci levels. This area is expected to face increased selling pressure, making it the primary target for the ongoing corrective movement.

Given this resistance, Ethereum appears likely to face rejection from this region, potentially continuing its bearish trend toward the $2K support level. However, if an unexpected bullish breakout occurs, the price could experience a robust surge, aiming to reclaim the wedge’s lower boundary and the crucial $2.8K mark.

Onchain Analysis: Futures Market and Potential Reversal

The recent significant price drop in Ethereum has led to speculation among investors about the continuation of the bearish trend. However, data from the futures market suggests that a reversal may be on the horizon.

The onchain analysis highlights Ethereum’s long liquidations, which measure the liquidation of long perpetual positions. Historically, in bull markets, a significant liquidation event is often followed by a price rally as the futures market stabilizes and spot buying pressure increases.

The recent cascade of long liquidations, reaching levels not seen since November 2022, likely indicates a cooling of the futures market, with many leveraged positions being flushed out. With the futures market potentially reset, a return of demand could position Ethereum for another impulsive bullish surge in the longer term.

A Critical Juncture for Ethereum

Ethereum’s recent price action suggests that the cryptocurrency is at a critical juncture. While the $2.1K support level has shown strong demand and led to a bullish rebound, the current resistance levels around $2.8K pose a significant challenge. The market’s next move will likely depend on whether Ethereum can overcome this resistance or if it will face a reversal, potentially testing the $2K support level again. As the futures market stabilizes, the potential for a bullish surge remains, making the coming weeks crucial for Ethereum’s trajectory.

FAQ: Ethereum’s Price Action and Market Outlook

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