Following a sharp 37% decline, Ethereum encountered significant buying activity near the $2.1K support region, leading to a bullish rebound.

However, the current price action suggests that ETH may be completing a pullback to the wedge’s lower boundary at $2.8K, which could signal a continuation of the bearish trend.

Technical Analysis

By Shayan

The Daily Chart

A closer look at Ethereum’s daily chart reveals a strong bullish response near the critical $2.1K support level, resulting in a rapid surge. This movement indicates robust demand around $2K, with investors showing interest at lower prices, reflecting their confidence in its long-term potential.

However, ETH is now encountering a substantial resistance level, which includes the previously broken lower boundary of the wedge and the key $2.8K threshold.

This area could potentially halt the upward momentum and trigger a reversal, marking a valid pullback to the broken level. If this occurs, Ethereum’s next target would likely be the psychological and decisive $2K support level.

The 4-Hour Chart

On the 4-hour chart, the cryptocurrency demonstrates signs of revival near the significant $2K support level, leading to minor corrective retracements.

However, the price has now reached a critical resistance zone, bounded by the 0.5 and 0.618 Fibonacci levels. This area is expected to face increased selling pressure and is likely the main target for the current corrective movement.

Given this resistance, ETH seems likely to face rejection from this region, potentially continuing its bearish trend toward the $2K support. 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

By Shayan

Ethereum has recently experienced a significant price drop, leading investors to speculate whether the bearish trend will continue. However, futures market data suggests that a reversal may be on the horizon.

The provided chart highlights Ethereum’s long liquidations, which measure the liquidation of long perpetual positions. In bull markets, a significant liquidation event is often followed by a price rally as the futures market stabilizes and spot buying pressure takes over.

The recent cascade has triggered massive long liquidations, reaching levels not seen since November 2022. This substantial liquidation cascade likely indicates a cooling of the futures market, where many leveraged positions have been flushed out.

With the futures market potentially reset, if demand returns, Ethereum could be poised for another impulsive bullish surge in the longer term.

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