ethereum price has failed to break above the $4,000 resistance level once again and is yet to create a new all-time high.
However, the market is showing resilience compared to other currencies during the current correction phase.
Technical analysis
The daily chart
As the daily time frame shows, eth price has fallen back to $3,500 after being rejected once again from the $4,000 resistance level. Currently, the $3,500 mark is holding and preventing the price from falling further towards $3,000.
However, if the $3,500 level breaks down, the market will most likely move quickly towards the $3,000 support zone and the nearby 200-day moving average.
These coincidental elements would make the $3,500 level key, and the price reaction will likely decide how the market moves in the coming months.
The 4 hour chart
The price has been hovering around the $3500 level in the 4-hour period. A classic chart pattern also formed around this area, which the price failed to break to either side.
Therefore, the direction of the next move depends on the direction of the possible breakout of this pattern.
The RSI is also oscillating around 50%, so not much can be drawn from it as it shows that momentum is roughly in balance.
Analysis of feelings
Open interest
This chart demonstrates ethereum open interest across all exchanges, which is the value of all futures contracts. High values usually generate volatility due to possible liquidation waterfalls.
Since eth price recovered from the $3,000 support level, open interest has massively skyrocketed from around 7 billion to almost 13 billion.
This increase has likely led to the recent rally, as some of these overleveraged positions have been liquidated and put selling pressure on the market. In the meantime, there may be more downside as open interest remains much higher than in March when eth was trading at the same prices.
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Cryptocurrency charts by TradingView.
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