This is how low ETH can go if $3.5K fails to maintain selling pressure (Ethereum Price Analysis)

ethereum has recently broken through a significant resistance level, surpassing the psychological milestone of $4,000 and reaching a new high for the year.

However, this advance met resistance, leading to a notable correction. The question that arises now is whether this correction is simply a temporary setback or the beginning of a broader reversal of the uptrend.

By shayan

The daily chart

A thorough analysis of the daily chart indicates a predominant bullish sentiment around ethereum, evident in a sharp and sudden rise that surpassed the critical resistance of $4,000. This increase reflects increased interest from market participants in ethereum, resulting in increased volatility.

However, after briefly breaking above the crucial $4,000 resistance level, the price encountered intensified selling pressure, likely due to profit-taking among participants, leading to a significant drop towards the substantial support zone of around $3,500. It seems likely that the market will find support in this region and start a new rally.

However, in the event of a continued corrective pullback, ethereum price is expected to find support around key levels within the Fibonacci retracement, specifically between the 0.5 ($3,181) and 0.618 ($2,966) levels.

The 4 hour chart

A closer examination of the 4-hour chart confirms the presence of buyers in the ethereum market, driving the price to its highest level since April 2022. This rise, accompanied by increased market volatility, demonstrates significant buying interest destined to exceed the previous historical price. maximum of 4.8 thousand dollars.

However, after breaking through the critical resistance level of $4,000, the price faced rejection, leading to a sharp decline targeting the key support zones around $3,500 and $3,300. Furthermore, an expanding bearish divergence between the price and the RSI indicator suggests the possibility of a notable market correction.

However, it is important to recognize that healthy bull markets often experience periods of consolidation correction, allowing the asset to rest and rebuild demand. Therefore, it seems likely that the price will find support in the medium term, continuing its general upward trend.

By shayan

ethereum price has risen rapidly in recent weeks, briefly surpassing its previous all-time high of $4,000. This rise has attracted numerous speculators to the market, increasing buying pressure and instilling confidence among investors.

The accompanying chart illustrates open interest, a valuable metric for assessing sentiment in the futures market. Open interest quantifies the number of perpetual futures contracts outstanding on various crypto exchanges.

It is evident that open interest has skyrocketed along with the recent bullish trend, reaching unprecedented levels. This increase indicates the intensity of long and short positions in the perpetual futures market, resulting in an overheated environment.

While high open interest is typical in a robust bull market, it can also contribute to higher volatility and unexpected market corrections. As such, it is prudent for investors to carefully manage their short-term risk.

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