Will ETH hit $3,500 or is another drop coming?

ethereum recently faced a notable rejection and experienced a 13.3% drop after breaking above the 100-day moving average.

Currently, the price is struggling to break below the 200-day moving average, which indicates a notable bearish signal if the breakout occurs.

By shayan

The daily chart

A close examination of ethereum’s daily chart reveals that after breaking above the critical 100-day moving average at $3,354 and a brief period of consolidation, it experienced a significant rejection, resulting in a 13.3% drop.

This drop has led to a break below the crucial support region of the 100-day moving average, suggesting a bull trap.

Despite this, ethereum has landed in a significant support region centered around the 200-day moving average at $3.2K.

This dynamic support zone is a crucial defense for buyers and potentially contains substantial demand.

If the price falls below this critical threshold, it would signal a notable bearish signal for the market, paving the way for the bearish pullback towards the lower boundary of the multi-month wedge at $2.8K. Therefore, ethereum’s next trajectory largely depends on its price action near the substantial 200-day MA.

The 4-hour chart

The 4-hour chart shows that ethereum faced increased selling pressure near its previous major pivot of $3,500, which led to a break below the lower boundary of the short-term ascending wedge.

This breakout catalyzed the bearish trend and momentum, resulting in a sharp drop towards the previously broken downtrend line. This move can be interpreted as a pullback towards the trend line, validating the breakout.

However, the overall price action indicates the presence of sellers in the market, with the price oscillating between the dynamic support of the descending trend line and the critical resistance region at $3.3K.

Optimism will return to the market if the price breaks the $3,300 zone and an uptrend will become more likely. On the contrary, if the price fails to regain the $3,300 zone, the continuation of the bearish retracement towards the $2,800 mark becomes the most likely scenario.

By shayan

ethereum has recently experienced a bearish reversal, dropping significantly towards the critical $3K support zone. Understanding the potential targets of an uptrend is essential to predicting future price movements.

The attached chart identifies potential sell-off zones within ethereum’s price action, offering insights for medium-term strategies by informed traders.

A notable amount of liquidity is located above the previous high of $3,500 and near the $4,000 mark, indicating that short positions in perpetual markets have primarily driven the recent bearish developments. Therefore, these price regions potentially serve as prime targets for smart money in the medium term, aiming to exploit these liquidity zones strategically, supporting further bullish momentum in ethereum price.

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