Is ETH Doomed to Fall to $2.1K After Recent Rejection?

ethereum's recent price movements reveal a strong presence of sellers, particularly around the critical resistance region at the 100-day moving average.

This price action suggests further downward pressure, and corrective consolidation is expected in the near term.

Technical analysis

By shayan

The daily chart

ethereum recently encountered increased selling activity at the $2.6K resistance area, aligned with the 100-day moving average. This triggered a rejection, pushing the asset back towards dynamic support at the channel's midtrend line near $2,300. The presence of sellers in this resistance zone suggests that it remains a major barrier for buyers, at least in the medium term.

Currently, eth is trading within a limited range between the channel's middle support boundary and the 100-day moving average. A new uptrend could be underway if the price successfully breaks the 100-day moving average and confirms a pullback.

In this scenario, ethereum's targets would be the 200-day MA at $2.9k and the upper limit of the channel near $2.8k. However, if the selling pressure intensifies and eth falls below $2,300, it may revisit the $2,100 support, likely leading to further pullbacks.

The 4 hour chart

On the 4-hour chart, ethereum's recent rally encountered significant selling pressure around the resistance zone between the 0.5 and 0.618 Fibonacci levels ($2.6K-$2.8K). This area has served as a strong barrier, indicating a concentration of supply. A change to an uptrend will depend on price action around this zone and a confirmed breakout.

Currently, ethereum remains near the lower limit of the flag at $2.4 thousand. A break below this support could trigger a liquidation cascade, which could push the price towards $2,100. However, the most likely scenario involves a consolidation phase around this support level, with eth potentially bouncing towards the 0.5 Fibonacci level until a decisive breakout occurs.

Chain analysis

By shayan

ethereum price has been consolidating within a tight range, indicating market indecision. However, futures market outlooks reveal that a breakout could lead to a substantial liquidation event, which would likely amplify the prevailing trend.

Based on the chart, liquidity has concentrated below the $2,400 level, suggesting that this price range may be pivotal in the short term. Significant liquidity pools below $2,400 indicate that a break lower could attract more sellers and cause long buyers to close their positions, intensifying the bearish momentum.

This scenario raises the possibility of a prolonged squeeze, where a cascade of liquidations could cause ethereum price to fall to the $2,100 support level. For sellers, the area below $2,400 is an attractive threshold for lowering prices. Rather, it represents a crucial line of defense for buyers, whose actions near this level will be critical in determining the broader market trend.

If eth falls below $2,400, it could quickly fall towards $2,100 due to the cascading effect of long liquidations. Alternatively, intense buying pressure at or near $2,400 could help stabilize the price, potentially preventing further declines.

Ultimately, ethereum price action near the $2,400 threshold will be decisive for the near-term trend, and any move beyond this range could signal a more decisive directional shift.

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