Key Resistance Halts ETH Ascent Towards $4K

ethereum has recently shown notable volatility, witnessing a 10% surge attributed to increased market activity surrounding President Trump's inauguration.

However, the asset is facing fundamental resistance at $3,500, and the next price action will likely define its next trend.

Technical analysis

By shayan

The daily chart

eth found significant buying interest near the 100-day moving average at the $3.2K mark, driving the price up by 10%. This increased buying pressure has brought the asset closer to a critical resistance region of $3,500, which aligns with the upper boundary of the bull flag.

If this momentum persists, ethereum is likely to surpass the $3,500 threshold, paving the way for a further rise towards the $4,000 resistance zone. However, short-term price action will be critical in determining market direction, and high volatility is expected.

The 4 hour chart

On the 4-hour time frame, eth volatility is evident as the price fluctuates near the 0.5-0.618 Fibonacci retracement levels. This range, capped by $3,200 as support and $3,500 as resistance, highlights the ongoing battle between buyers and sellers. The current market structure shows optimism, with the potential for a bullish breakout gaining momentum.

If buyers are successful, ethereum could embark on a sustained rally towards $4,000. However, increased volatility and potential sell-offs require careful risk management as a rejection of $3,500 could lead to short-term pullbacks.

Chain analysis

By shayan

While ethereum has been consolidating within a tight range of $3.2K to $3.5K, market participants are considering the likelihood of a bullish breakout following President Trump's inauguration.

The funding rates metric, a key indicator of market sentiment, has shown declining values ​​recently, suggesting a reduction in long positions and fading bullish sentiment. However, the metric has risen sharply lately, suggesting growing bullish momentum in perpetual markets.

As ethereum approaches the $3,500 resistance level, the presence of notable supply at the moment underlines the need for sustained bullish momentum. For a decisive breakout to occur, the funding rates metric must rise further, reflecting increased market optimism and an increase in long positions.

A break above $3,500 remains contingent on stronger bullish sentiment in the futures market. The funding rates metric will play a pivotal role in determining whether ethereum can break the $3,500 threshold, making next market action crucial.

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