Ethereum Pullback Looms as Bullish Momentum Stalls—Traders Brace for Volatility
Ethereum's relentless rally hits a wall as technical indicators flash warning signs. The second-largest cryptocurrency by market cap shows fading bullish momentum, with key support levels now in focus.
Market watchers note weakening buying pressure after ETH failed to sustain its latest push toward all-time highs. The pullback could offer entry points for long-term believers—or trap overleveraged speculators chasing yesterday's gains.
Meanwhile, decentralized finance activity on Ethereum continues growing, proving the network's utility extends far beyond price speculation. (Take that, Wall Street.)
Technical Analysis
By ShayanMarkets
The Daily Chart
Ethereum continues to face firm resistance at the 200-day moving average, currently hovering near the $2.6K level. This barrier has so far remained unbroken, signaling persistent bearish sentiment and a lack of follow-through from the bulls. The ongoing failure to reclaim this level suggests the formation of a distribution phase, often indicative of increased sell-side pressure.
Moreover, the appearance of a bearish divergence between price and the RSI indicator adds weight to the case for a potential pullback. With momentum fading, a gradual decline toward the $2.2K support region is becoming a likely short- to mid-term scenario.
However, should ETH unexpectedly break above the 200-day MA, it may trigger a short squeeze, propelling the price sharply higher due to the liquidity resting above the current resistance.
The 4-Hour Chart
Zooming into the 4-hour timeframe, ethereum remains confined within a rising wedge pattern, typically viewed as a bearish reversal formation. After bouncing off the wedge’s lower boundary near $2.5K, the price has made another attempt at testing resistance around $2.6K, but upward momentum appears to be lacking.
The current structure suggests further range-bound movement inside the wedge until a decisive breakout occurs. Given the bearish setup, a downward break from the pattern seems more probable, potentially targeting the $2.2K support zone. Still, traders should be mindful of the liquidity cluster above $2.7K, which could attract smart money activity and initiate a liquidation-driven rally before any correction materializes.
Onchain Analysis
By ShayanMarkets
Ethereum is currently consolidating within a wedge pattern, reflecting a phase of indecision in the market. The Binance Liquidation Heatmap highlights key liquidity zones that may influence price direction. Notably, significant liquidity clusters are positioned near the $2.5K and $2.7K levels, just below and above the wedge.
These areas are prime targets for smart money to trigger liquidations and exploit retail positioning. As such, a breakout in either direction could prompt a sharp MOVE fueled by a liquidation cascade. Given the elevated potential for volatility, disciplined risk management will be crucial in the days ahead.
