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Ethereum Price Analysis: ETH Bullish Structure in Danger as Warning Signs Appear
The Ethereum (ETH) market has been trending upwards, with the asset showing resilience above key levels after a sharp move from $2,200 to around $4,000. However, despite this bullish structure, warning signs are starting to appear on the charts.
Firstly, a closer look at the daily chart reveals that ETH is currently consolidating below the $4,000 zone after its aggressive rally from the $2,800 breakout level. The asset is holding above the previous resistance-turned-support at the $3,400 area, and buyers are defending that zone well thus far.
The 100-day moving average has also started to curl up and is chasing the price, confirming the bullish structure and momentum. In order for this trend to continue, it’s essential to hold support at the $3,400 region. If this level breaks down, a deeper correction towards the $2,800 area could be on the cards.
The 4-hour chart paints an even more concerning picture. ETH has swept the $3,700 highs and was rejected twice, indicating exhaustion in the short term. The asset is now creating a lower high and potentially a lower low after weeks of bullish structure, which could signal the start of a deeper pullback if the $3,700 resistance level holds.
Despite this, ETH is still respecting local demand at $3,500 for now, keeping short-term bias neutral to bullish. However, if this level breaks down, sellers might be attracted, potentially leading to a move towards $3,300 and further lower levels.
It’s also worth noting that open interest has started to decline after peaking near $28 billion around the time ETH reached $3,800. This slight dip in OI during consolidation could indicate some long positions have been closed or liquidated. Nevertheless, the broader trend remains upward, with open interest more than doubling since May. This suggests that traders are still heavily participating in ETH derivatives, although a reset might be necessary to avoid excessive risk buildup.
In summary, while the Ethereum price is showing resilience above key levels and maintaining its bullish structure for now, warning signs of exhaustion are starting to appear on the charts. A failure to hold support at $3,400 could lead to a deeper correction towards $2,800, whereas reclaiming $3,700 and holding above it would open the door to $4,100 and possibly even higher targets.
Source: cryptopotato.com
