Ethereum Price Analysis: Will ETH Charge Toward $3.5K or is Another Crash Incoming?

3 months ago 36

Ethereum has recently faced a notable rejection and experienced a 13.3% decline after breaking above the 100-day moving average.

The price is currently struggling to break below the 200-day MA, indicating a notable bearish sign if the breakout occurs.

Technical Analysis

By Shayan

The Daily Chart

A close examination of Ethereum’s daily chart reveals that after breaking out above the critical 100-day moving average at $3,354 and a brief period of consolidation, it experienced a significant rejection, resulting in a 13.3% drop.

This decline has led to a break below the crucial 100-day MA support region, suggesting a bull trap.

Despite this, Ethereum has landed on a significant support region centered around the 200-day moving average at $3.2K.

This dynamic support zone is a crucial defense for buyers, potentially holding substantial demand.

If the price breaks below this critical threshold, it would indicate a notable bearish sign for the market, paving the way for the bearish retracement toward the multi-month wedge’s lower boundary at $2.8K. Therefore, Ethereum’s upcoming trajectory heavily depends on its price action near the substantial 200-day MA.

The 4-Hour Chart

The 4-hour chart shows that Ethereum faced increased selling pressure near its prior major pivot of $3.5K, leading to a break below the short-term ascending wedge’s lower boundary.

This breakout catalyzed the bearish trend and momentum, resulting in a steep decline toward the previously broken descending trendline. This move can be interpreted as a pullback to the trendline, validating the breakout.

However, the overall price action indicates the presence of sellers in the market, with the price oscillating between the dynamic support of the descending trendline and the critical resistance region at $3.3K.

Optimism will return to the market if the price breaks above the $3.3K region, and a bullish trend will become more likely. Conversely, if the price fails to reclaim the $3.3K region, continuing the bearish retracement toward the $2.8K mark becomes the most probable scenario.

Onchain Analysis

By Shayan

Ethereum has recently experienced a bearish reversal, declining significantly toward the critical $3K support zone. Understanding the potential targets for a bullish trend is essential for predicting future price movements.

The accompanying chart identifies potential liquidation zones within Ethereum’s price action, offering insights for mid-term strategies by informed traders.

A notable amount of liquidity is resting above the prior major swing high of $3.5K and near the $4K mark, indicating that short positions in the perpetual markets have primarily driven the recent bearish developments. Therefore, these price regions potentially serve as the primary targets for smart money in the mid-term, aiming to exploit these liquidity zones strategically, supporting further upward momentum in Ethereum’s price.