ETH Slides Below $3,500 But Bullish Presence Remains Strong (Ethereum Price Analysis)

ethereum price has gone through an extensive sideways consolidation phase after a drop towards the critical $3K support level.

Despite this, the cryptocurrency appears confined within a range between $3,000 and $3,700, and volatility is unlikely to increase unless it manages to break out in either direction.

By shayan

The daily chart

A thorough analysis of the daily chart reveals ethereum's prolonged sideways consolidation after finding substantial support around the $3,000 threshold. This zone aligns with important Fibonacci retracement levels ranging between 0.5 ($3,190) and 0.618 ($2,972) along with the fundamental 100-day moving average at $2,972. This confluence of support levels fueled a rally in eth price, pushing it towards the upper limit of the range at $3,700.

However, the recent price action has encountered resistance near the upper limit of the range, suggesting the presence of sellers at this critical time.

However, ethereum remains in a sideways consolidation phase, and market participants anticipate a bullish revival aimed at surpassing this crucial price range.

The 4 hour chart

A closer examination of the 4-hour chart reveals the formation of a sideways wedge pattern during a period of corrective pullbacks. Typically, these patterns indicate a possible continuation of the uptrend after a breakout of the upper boundary.

Despite this, ethereum experienced significant buying pressure in the vicinity of the notable $3,000 support region, resulting in renewed bullish momentum that breached the upper boundary of the wedge.

This price action underlines the dominance of buyers in the market. However, upon reaching the $3,700 resistance level, ethereum faced rejection, causing a slight pullback.

Currently, following this pullback, the price has returned to the broken wedge level, potentially completing a pullback. If this pullback is successful, ethereum price is primed for another rally, targeting the $3.7K threshold. On the contrary, the possibility of a bearish retracement cannot be ruled out, with the next support level at $3,200.

By shayan

While ethereum price has shown signs of recovery, it would be beneficial to determine whether this is a result of spot buying pressure or leveraged futures positions.

The chart below shows the exchange reserve metric, which measures the amount of eth held in exchange wallets.

It is evident that after a sharp rise above the 30-day moving average a few weeks ago, the FX reserves metric has fallen back below the MA. This indicates that investors have been withdrawing eth from exchanges, which is a sign of spot buying pressure. Therefore, spot market demand is playing a major role in a possible rally higher, which could result in a more sustainable uptrend.

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