ETH regains crucial resistance, how far can it go?

Following former President Trump's election victory in 2024, the cryptocurrency market has seen a surge in optimism and buying interest.

ethereum was no exception as its price soared by 10% at one point, reaching the critical resistance level of $2.5k. A sustained break above this threshold could further fuel the bullish momentum.

Technical analysis

By shayan

The daily chart

On the daily chart, ethereum saw increased buying activity near the $2,300 support, which coincides with the middle boundary of the multi-month descending channel. This buying pressure brought the asset back to the 100-day moving average, lining up with the $2,500 resistance zone. This region has seen the presence of sellers in the past, suggesting that it is a major barrier to eth's upward movement.

However, if the buying pressure continues, ethereum could potentially break this resistance, leading to a short squeeze and a continuation of the uptrend. In this bullish scenario, the 200-day MA at $2,800, aligning with the upper boundary of the channel, would become the next target for buyers.

The 4 hour chart

The 4-hour chart highlights the initial rise from $2,300, a support zone that marked the lower boundary of a descending flag pattern. Concentrated buying pressure at this level has pushed ethereum closer to decisive resistance between $2,600 and $2,800, defined by the 0.5 to 0.618 Fibonacci levels.

This zone represents a substantial supply area and may lead to a short-term consolidation phase as eth buyers deal with selling pressure.

For ethereum to mark a confirmed uptrend, a break above this resistance zone with strong volume would be necessary, which could open the way to a prolonged uptrend. Meanwhile, price action around this resistance level will be critical as it will determine whether ethereum can build on its current momentum or faces a temporary pause in its bullish rally.

Chain analysis

By shayan

ethereum's recent rise towards the $2,500 resistance region has sparked optimism among investors, many of whom are anticipating the start of a new bullish rally. Key futures market indicators such as open interest and funding rate metrics provide insight into trader sentiment and participation levels.

The graph highlights that both open and financing interest rates have shown positive values ​​during this recent upward trend, reaching higher levels than in previous months. This increase indicates increased participation and generally bullish sentiment among futures traders. While strong participation is often essential for a sustained bull market, too high optimism in the futures market can also pose risks.

Currently, neither open interest nor funding rates have reached alarming levels, suggesting there is still room for these metrics to rise without immediate risk. However, a sudden increase in these values ​​could introduce greater volatility and raise the risk of a long cascade of liquidations, which could lead to a rapid drop in prices.

Given these dynamics, investors may want to exercise caution in the near term, closely monitoring these metrics and carefully managing risk levels to prepare for potential volatility.

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