Where is ETH headed after gaining 7% weekly?

ethereum has reached a decisive point at the head and shoulders neckline and the crucial 100-day moving average. A potential breakout will likely lead to a significant rally due to a massive cascade of short liquidations.

The price action in the coming days will play a crucial role in determining the broader outlook for eth.

Technical analysis

By shayan

The daily chart

ethereum has reached a decisive point in a crucial resistance region consisting of the head and shoulders neckline and the 100-day moving average at $2.7 thousand. The price action in recent days has shown a sideways movement of low volatility, reflecting a state of balance between buyers and sellers. This indicates indecision in the market, with neither party able to take control.

If ethereum can break through this key resistance zone, it would confirm the completion of the H&S pattern, indicating a possible medium-term uptrend. A successful breakout would also mean that the asset would reclaim the 100-day MA, reinforcing the bullish momentum. In this scenario, ethereum price could target the $3,000 threshold, another significant resistance level.

However, this area is full of supply and if not overcome, could lead to a rejection, stalling any bullish movement. Therefore, the upcoming price action will be critical in determining ethereum's broader prospects.

The 4 hour chart

On the 4-hour chart, ethereum is showing sideways consolidation near the resistance zone bounded by the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci retracement levels. This area has been a challenge for buyers, as several previous attempts to break it were rejected due to significant selling pressure.

Furthermore, a slight bearish divergence is emerging between the price and the RSI indicator, suggesting a gradual increase in the power of the sellers. This could signal an imminent rejection at the resistance zone, leading to a drop towards the $2,300 support level.

On the contrary, a sudden break above $2,700 would open the way for further gains, which could lead to a rally towards the $3,000 threshold. As a result, the next price movement will provide important information about the next trend of ethereum.

By shayan

As ethereum approaches a substantial resistance region around $2.7K, futures market analysis provides essential information on the possible price direction in the coming days. The Binance Liquidation Heatmap highlights critical liquidity pools that represent a concentration of stop-loss orders and futures position liquidation levels.

The chart reveals a noticeably concentrated liquidity pool just above the $2,700 resistance region, indicating many short positions clustered in this area. This is important because liquidations amplify price movements when prices approach such levels, triggering a cascade of liquidations. In this case, a possible break above $2,700 would likely lead to the liquidation of many short positions, which would increase buying pressure and potentially push the price up even further.

However, there is also the possibility of a false breakout leading to a bullish trap. In such scenarios, larger market participants or whales can exploit the high liquidity by executing large trades that briefly raise the price above $2.7 thousand, only to quickly reverse the trend. This rapid price reversal could catch overleveraged traders off guard, pushing ethereum price back below $2,700 and trapping buyers anticipating a sustained breakout.

<!– ai CONTENT END 1 –>