What’s Next for ETH After 7% Weekly Gain? Key Resistance Ahead

Ethereum is at a pivotal moment, facing the head and shoulders neckline as well as the critical 100-day moving average. A breakout could set off a notable upward movement due to a wave of short liquidations that may follow.

The upcoming price action is crucial for assessing ETH’s wider market outlook.

Technical Assessment

By Shayan

Daily Perspective

Ethereum has arrived at a pivotal resistance point characterized by the Head and Shoulders neckline and the 100-day moving average situated at $2.7K. Recent trading activity indicates a low-volatility sideways trend, which reflects a balance between buyers and sellers, highlighting market indecisiveness.

A successful breakout above this resistance area would signal the completion of the H&S pattern, indicating a potential mid-term uptrend. Such a breakout would also reclaim the 100-day MA, thereby strengthening bullish momentum. In this scenario, Ethereum’s price might aim for the $3K mark, another significant resistance barrier.

Conversely, this zone is saturated with sell orders, and failing to break through could result in a rejection, stalling any upward trajectory. Consequently, the forthcoming price action becomes vital for determining Ethereum’s future outlook.

Four-Hour View

Within the 4-hour timeframe, Ethereum is consolidating around the resistance zone outlined by the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci retracement levels. This area has proven challenging for bulls, with numerous prior break attempts facing rejection from significant selling pressure.

Additionally, a slight bearish divergence is forming between the price and the RSI indicator, implying a gradual strengthening of selling pressure. This may suggest a likely rejection at the resistance zone, potentially leading to a decline toward the $2.3K support line.

On the other hand, a break above $2.7K could pave the way for further gains, possibly propelling a rally towards the $3K resistance level. Therefore, monitoring upcoming price movements will be essential for gauging Ethereum’s next trend.

By Shayan

As Ethereum approaches the significant resistance point near $2.7K, delving into the futures market offers valuable insights into potential price movements in the near term. The Binance Liquidation Heatmap identifies key liquidity pools that represent a concentration of stop-loss orders and future position liquidation levels.

The chart highlights a notably concentrated liquidity pool just above the $2.7K resistance area, suggesting a dense clustering of short positions in this threshold. This is critical, as liquidations can significantly amplify price movements when approaching such levels, potentially provoking a liquidation cascade. Subsequently, a successful breakout beyond $2.7K is likely to trigger the liquidation of many shorts, enhancing buying pressure and possibly propelling prices higher.

Nonetheless, there is also a risk of a false breakout resulting in a bull trap. In these cases, larger market entities or whales may take advantage of the abundant liquidity by executing substantial trades that temporarily push the price above $2.7K, only to quickly reverse direction. Such a rapid price reversal could catch overleveraged traders off guard, driving Ethereum’s price back below $2.7K and entangling those who anticipated a sustained breakout.