Ethereum is showing strong upward momentum, with the recent rally pushing the price towards the key $4,000 resistance area.
Further upside is possible as we approach this key resistance level, but overbought conditions could lead to a short-term corrective consolidation.
technical analysis
Written by Shayan
daily chart
After successfully reclaiming the $3.5,000 resistance level, Ethereum continued its bullish trend and reached the key resistance area at $4,000. This price range is very important as it coincides with ETH's annual high and has acted as a strong resistance level in previous attempts. This price range may contain significant selling pressure, which could prevent the asset from moving higher in the short term.
However, a breakout above this level would indicate a continuation of the bullish trend and could lead to new all-time highs. Given the market's overbought condition and strong impulsive movements, we expect a period of correction within the $3.5,000-$4,000 range before moving higher. The RSI indicator also supports this scenario, with overbought conditions highlighting the possibility of a consolidation or correction phase in the near future.
4 hour chart
On the 4-hour chart, ETH price is still making new highs and lows, confirming the general bullish trend. However, the RSI is showing a bearish divergence, indicating that bullish momentum is being lost. This could lead to a short-term decline or consolidation, especially around the $4,000 resistance area.
A temporary rejection is likely as Ethereum tests resistance at $4,000. The $3.5,000 support level, which has seen strong buying pressure in the past, is likely to be retested. If ETH finds support at this level, it could lead to another attempt to break out of the $4,000 resistance.
On-chain analysis
Written by Shayan
Examining Ethereum futures market indicators can provide valuable insight into market sentiment and complement price analysis. One important metric to look at is the taker-buy-sell ratio, which reveals the aggressiveness of buyers and sellers in order execution.
As shown in the chart, we observe a noticeable increase in sell orders in the market as the Ethereum price approaches the significant resistance level of $4,000. This surge in sell orders has pushed the taker-buy-sell ratio to its lowest level in months.
This change suggests that future market participants may lock in profits or brace for a potential price correction. A decline in the taker-buy-sell ratio suggests that price appreciation may slow as more market participants take a risk-off approach. This is consistent with predicting price declines or corrections, making it important for traders to monitor further developments in the futures market.
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Cryptocurrency charts by TradingView.
