Ethereum Price Analysis: Failure to Overcome This Resistance Level Would Mean Trouble for ETH

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As a seasoned analyst with years of trading under my belt and a penchant for deciphering market patterns, I find myself intrigued by Ethereum’s recent price action. The bullish momentum is palpable, but caution remains the watchword as we approach the critical resistance at $3.5K.

current trends in Ethereum‘s pricing indicate a blend of optimistic advancement and careful accumulation, as the price edges towards a significant barrier at approximately $3,500.

Reaching beyond this point might initiate a substantial upward trend, however, there’s still a chance we could see more of a holding pattern continuing.

Technical Analysis

By Shayan

The Daily Chart

The progress of Ethereum has been characterized by periodic pullbacks that found stability around the 200-day moving average at approximately $3,000. This area proved to be a strong foundation, as increased buying interest caused the asset to regain momentum towards the important resistance level of $3,500, which corresponds with previous peak prices.

Regardless of the current bullish trend, the $3.5K mark serves as a significant barrier for sellers. If buyers manage to break through this resistance, Ethereum is expected to ascend further towards its record peak. However, if they fail to exceed this level, we might experience a prolonged period of stabilization as the market processes recent price increases.

The 4-Hour Chart

In simpler terms, over a 4-hour period, Ethereum’s upward trend becomes more apparent, reaching close to the $3.5K barrier. After this strong increase, the price has paused and created an ascending wedge shape. This pattern is typically seen as bearish, hinting at a possible phase where sellers might outnumber buyers, potentially leading to a drop in price.

Furthermore, when the price moves upward while the Relative Strength Index (RSI) shows a downward trend, it’s known as a bearish divergence. This suggests that the momentum may be weakening. Added to the resistance at $3.5K, this situation could boost the chance of a temporary halt or slight decline.

Nonetheless, the cryptocurrency market remains unpredictable, and the substantial influx of participants could trigger sudden price surges. Such movements might result in short liquidation cascades, rapidly pushing the price higher. Given these dynamics, traders should exercise caution and closely monitor market conditions during this critical phase.

Onchain Analysis

By Shayan

Ethereum has been steadily reaching new highs followed by new peaks in its price chart, approaching the significant barrier of $3.5K. Yet, it hasn’t managed to break through these crucial levels, either above $3.5K or below $3K. This persistent failure significantly impacts market fluidity.

The heatmap shows that there’s a significant amount of funds sitting below the $3K mark, which might be due to stop-loss orders and liquidation points placed by major market players like whales. This could be why the price has been steadily kept above this level. It appears these big players are working hard to prevent a fall below this point, because such an occurrence would lead to a chain reaction of liquidations, causing them to suffer losses.

Similarly, the $3.5K zone also holds considerable liquidity, representing a concentration of sell orders and liquidation levels for short positions. This liquidity has turned the $3.5K mark into a formidable resistance, with sellers and profit-takers dominating near this level. A breakout above it, however, could set off a cascade of short liquidations, fueling a rapid surge in Ethereum’s price. Ethereum’s price is currently oscillating between these two significant liquidity zones, creating a consolidation phase. A breakout in either direction could dramatically amplify market volatility.

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2024-11-25 15:48