Ethereum’s price has been experiencing a period of sideways consolidation after dropping to the critical support level of $3K. Despite attempts to push the price towards $3.7K, the cryptocurrency remains stuck within this range. Volatility is unlikely to increase until a breakout occurs in either direction.
Analyzing the daily chart, it is evident that Ethereum has been consolidating sideways after finding strong support at $3K. This support zone aligns with significant Fibonacci retracement levels and the 100-day moving average, acting as a solid foundation for the price. However, resistance near $3.7K has prevented Ethereum from breaking out of this range completely.
Looking at the 4-hour chart, a sideways wedge pattern has formed during corrective retracements. This pattern typically indicates a continuation of the bullish trend upon breakout. Ethereum experienced buying pressure at $3K, leading to a bullish momentum that breached the upper boundary of the wedge. Despite this, resistance at $3.7K has caused a slight retracement. If the pullback is successful, Ethereum may see another upswing towards $3.7K, but a bearish retracement to $3.2K cannot be ruled out.
While Ethereum’s price has shown signs of rebound, it is crucial to determine the driving forces behind this movement. The exchange reserve metric, which measures the amount of ETH held on exchange wallets, indicates that investors have been withdrawing ETH from exchanges. This suggests spot buying pressure is influencing the market, potentially leading to a sustainable uptrend.
Ethereum’s price remains in a phase of consolidation, with a breakout needed to determine the next major direction. Technical analysis highlights key support and resistance levels, while market trends suggest spot buying pressure is supporting the current rally. Traders and investors should monitor these factors closely to make informed decisions in the volatile cryptocurrency market.