Resume: Ethereum Price Analysis: ETH Rebounds After Sharp Decline 📈

After a notable 37% decrease, Ethereum saw substantial buying activity around the $2.1K support level, leading to a bullish recovery. However, current price action indicates that ETH might be finishing a pullback to the wedge’s lower boundary at $2.8K, potentially signaling a continuation of the bearish trend.

Reassessment of Technical Indicators

Revisiting the Daily Chart

Examining Ethereum’s daily chart reveals a robust bullish response near the critical $2.1K support level, resulting in a rapid surge. This movement suggests strong demand around $2K, with investors showing interest at lower prices, demonstrating confidence in its long-term prospects.

Nevertheless, ETH is now facing significant resistance, encompassing the previously broken lower boundary of the wedge and the key $2.8K threshold.

This resistance zone could hinder upward momentum and initiate a reversal, potentially leading to a pullback to the broken level. In such a scenario, Ethereum’s next target might be the psychological $2K support level.

Analysis of the 4-Hour Chart

On the 4-hour chart, the cryptocurrency displays signs of recovery near the crucial $2K support level, resulting in minor corrective retracements.

However, the price has currently reached a pivotal resistance zone delimited by the 0.5 and 0.618 Fibonacci levels. This area is anticipated to face heightened selling pressure and is likely the primary target for the ongoing corrective movement.

Given this resistance, ETH could encounter rejection from this region, possibly continuing its bearish trajectory towards the $2K support. Yet, if an unexpected bullish breakout transpires, the price might witness a substantial surge, aiming to reclaim the wedge’s lower boundary and the vital $2.8K mark.

Insights from Onchain Analysis

Ethereum recently underwent a notable price decline, prompting speculation about the continuation of the bearish trend. Nevertheless, futures market data indicates a potential reversal in the near future.

The provided chart emphasizes Ethereum’s long liquidations, which measure the liquidation of long perpetual positions. During bull markets, a significant liquidation event is often succeeded by a price rally as the futures market stabilizes and spot buying pressure dominates.

The recent cascade of long liquidations has reached levels unseen since November 2022, indicating a significant cooling off in the futures market, with numerous leveraged positions being flushed out.

With the futures market potentially reset, a resurgence in demand could position Ethereum for another strong bullish surge over the long term.

Hot Take: Final Thoughts on Ethereum’s Price Movement 🚀

Overall, Ethereum’s price analysis suggests a mixed outlook, with key resistance levels posing a challenge for further upward movement. However, onchain data hints at a possible bullish reversal in the future, depending on market dynamics and investor sentiment. Keep a close watch on Ethereum’s price action for potential trading opportunities in the coming days.

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Sources:
– TradingView
– CryptoQuant