Ethereum is showing signs of recovery as it bounces from a significant support level near the midpoint of its descending price channel. This rally positions the asset to challenge a major resistance at the 100-day moving average, signaling a potential shift into bullish territory.
The rebound near $2,400 has been supported by strong demand, pushing the price toward the $2,600 resistance zone, closely aligned with the 100-day moving average. A successful breakout above this level would likely mark the start of a sustained uptrend, targeting the 200-day moving average near $2,900 and the upper boundary of the descending channel around $2,800. However, failure to overcome this resistance could prompt Ethereum to consolidate or retest the $2,400 support area, delaying the anticipated bullish momentum.
Short-Term Chart Analysis and Key Fibonacci Levels
On the 4-hour chart, Ethereum’s upward movement forms a bullish flag pattern, with its price action supported by a temporary surge in buying interest. ETH is currently encountering resistance at the 0.5 and 0.618 Fibonacci retracement levels between $2,600 and $2,800. Breaking above these levels could trigger a wave of short liquidations, propelling the price closer to $3,000.
However, a rejection at these resistance points may signal the need for further accumulation. In such a case, Ethereum could revisit support levels at the lower boundary of the flag pattern or near $2,400 before making another attempt to break higher.
Market Dynamics and Sentiment Indicators
Ethereum’s positive funding rates in the futures market reflect growing optimism among traders, though they remain below levels seen during the March rally. This indicates that while sentiment is improving, it has not yet reached the intensity needed for a major breakout. Rising funding rates will be a critical factor in sustaining upward momentum, as they reflect increased demand from leveraged traders and add upward pressure on the price.
As Ethereum continues to navigate between resistance and support zones, a decisive move beyond the current range could confirm the start of a broader rally. A sustained push above $2,800 and into the $3,000 territory would solidify the asset’s bullish outlook and potentially attract further buying interest from institutional and retail investors alike.
