ETH gains 3% daily, but faces critical resistance

ethereum is witnessing increased buying activity near the 100-day moving average at $3.2k, fueling optimism for a bullish breakout.

The asset appears set to challenge the critical $3.5k resistance zone, a decisive level that could dictate its midterm trajectory.

Technical analysis

By Shayan

The daily table

ethereum has consolidated within a tight range defined by the 100-day moving average at $3.2k and the important $3.5K resistance zone, which also aligns with the upper boundary of a bullish flag pattern. The recent bounce off the 100-day MA suggests growing demand, pushing the price towards the upper limit of this range.

A break above the $3.5k threshold would likely indicate a continuation of the uptrend, targeting the swing high of $4K. However, a rejection at this level could lead to a period of increased volatility and potential consolidation near the current range. The coming days will be pivotal in shaping eth's trajectory, and a breakout looks increasingly likely given the prevailing bullish sentiment.

The 4 hour table

On the lower term, ethereum recently consolidated around the 0.5 Fibonacci retracement level ($3.2k), indicating a balance between buyers and sellers. The asset subsequently gained upward momentum, slightly violating the upper boundary of the falling wedge and confirming a short-term bullish reversal.

Despite this progress, ethereum runs into a robust resistance zone at $3.5k, where significant supply pressure could emerge. A likely scenario involves a brief rise from this level and a pullback towards the broken upper boundary of the wedge to validate the breakout. If this pullback attracts enough buying interest, ethereum could reclaim the $3.5k level, setting the stage for a rally towards the $4K resistance zone.

The next price action will be critical, with ethereum's ability to clear the $3.5k resistance determining the sustainability of its bullish momentum.

Candle analysis

By Shayan

The open interest metric, which tracks the number of active futures contracts across all exchanges, has risen steadily in recent weeks, reaching its highest values. This indicates growing participation in the futures market, with traders aggressively opening new long positions.

Interestingly, there is a divergence between the price of ethereum and futures market activity. Despite the significant increase in open interest, the price has yet to break its previous highs, showing a potential imbalance between market expectations and price action.

High open interest indicates a higher probability of liquidation cascades, which often accompany sudden price movements. This could lead to explosive price action in the short term, with the market likely choosing a decisive direction.

While the direction of the breakout remains uncertain, prevailing sentiment and activity suggest a bullish breakout as the most likely scenario. If eth successfully breaks through key resistance levels, it could set the stage for a sustained rally.

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