These Are ETH's Most Likely Next Targets: Ethereum Price Analysis

ethereum's recent attempt to break through the multi-month descending channel mid-threshold of $2,600 has turned out to be a false breakout, leading to notable rejection and a sharp drop.

This pattern suggests a possible medium-term continuation of the downtrend towards the $2,100 support level.

By shayan

The daily chart

ethereum price action on the daily chart has highlighted a bullish trap. Just like in late August, when eth broke through the middle threshold of the descending channel only to be quickly rejected, a similar pattern has developed recently.

After the price briefly broke above the $2.6K resistance, it failed to maintain momentum and faced considerable selling pressure, resulting in a 15% drop. This failure to set a higher high indicates the dominance of the sellers in the market.

Now, the cryptocurrency is approaching a crucial support zone around $2.1k, which lines up with a previous major low. It seems likely to enter a downward consolidation phase in the medium term, gradually descending towards this key level.

The 4 hour chart

On the 4-hour chart, ethereum's inability to maintain upward momentum near the 0.5 ($2,600) – 0.618 ($2,800) Fibonacci levels triggered a bearish three-momentum pattern.

This well-known reversal pattern and a bearish divergence between the price and the RSI indicator suggested that sellers were regaining control of the market. Consequently, ethereum experienced a sharp decline, retreating towards the lower boundary of the $2.3K ascending flag.

Currently, sellers aim to push the price of ethereum below the flag's lower boundary, which would likely start a new downtrend. If this breakout to the downside occurs, eth's next major target would be the psychological support at $2,000. However, the $2.1 thousand threshold remains buyers' first line of defense.

By shayan

This analysis focuses on the 50-day moving average of ethereum funding rates, which provides a clearer picture of the broader sentiment within the futures market.

Recently, eth's 50-day moving average funding rate has been steadily declining, reaching its lowest level in 2024. This persistent bearish trend highlights the bearish sentiment among futures traders, indicating a general lack of buying interest in the market. These conditions are usually linked to falling prices as short sellers dominate the market.

For ethereum to recover and reach higher price levels, demand from the perpetual futures market must increase. The continued decline in funding rates suggests that selling pressure is more aggressive than buying interest, reflecting bearish expectations for eth in the medium term.

Although negative funding rates are generally associated with bearish conditions, they can sometimes indicate a possible market reversal.

This happens through short liquidation cascades, where aggressive short positions are liquidated, causing a rapid increase in price. However, for this to occur, substantial buying pressure from the spot market needs to support a rally.

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