What’s on the Horizon for ETH Following a 50% Monthly Rise?

Ethereum is currently stabilizing just below a significant resistance area after a noteworthy rise earlier this month. Although the price trend remains bullish in a technical sense, ETH has not yet validated a breakout past this essential threshold.

Market Analysis

Daily Insights

Within the daily timeframe, ETH is positioned just beneath the intersection of the 200-day moving average and the $2,800 resistance level. Conversely, the 100-day moving average is situated lower, offering support near the $2,100 demand area. The price’s confinement between these moving averages suggests that a breakout in either direction could initiate a robust trend movement.

Simultaneously, the RSI hovers around 66, just shy of overbought territory yet exhibiting a downward trend, signaling a reduction in upward momentum. This adds to the emergence of a bearish divergence, suggesting that a price correction may occur in the forthcoming weeks.

4-Hour Analysis

Shifting to the 4-hour chart, Ethereum is displaying signs of diminishing momentum. Following a significant surge past $2,100, the price has been stabilizing within a tight ascending channel around $2,500 to $2,600. Nevertheless, the RSI has shown a minor upward trend, indicating a gradual shift in momentum favoring buyers in this timeframe.

However, for a substantial upward movement to commence, the asset must break free from the channel decisively, accompanied by increased volume. Failing to maintain above the $2,600 level, which is currently serving as short-term support, could result in a breakdown of the channel and a retreat toward the $2,100 demand area.

The open interest for Ethereum has risen significantly, reaching $18.5 billion, nearing its prior all-time highs from earlier in the year. This considerable increase in open interest, alongside rising prices, points to a buildup of leveraged long positions in the market.

While this generally signals robust bullish sentiment and confidence among traders, it also presents potential risks. A swift increase in open interest without a definitive breakout can indicate overcrowding, raising the likelihood of a pullback triggered by liquidations. The current market positioning reflects heightened expectations for a move above the $2,800 mark.

Nevertheless, if ETH is unable to surpass that resistance, the market may experience a rapid correction as overleveraged long positions are liquidated.