Ethereum’s recent rebound has lost momentum after yet another unsuccessful effort to break through the overhead resistance level. The market continues to maintain its position above the February base, sustaining the broader recovery narrative. However, the recent rejection indicates that bulls have yet to assert full dominance. Currently, ETH appears to be trapped between a short-term structure that is still showing signs of improvement and a higher-timeframe trend that continues to exhibit fragility. On the daily chart, ETH continues to trade beneath the 100-day and 200-day moving averages, which are positioned around the $2.6k and $3.2k levels, respectively. Consequently, the overall framework continues to exhibit bearish tendencies, even with the rebound from the recent lows. The market has shown significant improvement since the bounce from the $1.8k region; however, it continues to operate under major trend resistance and remains below the critical supply zones that must be breached for a more definitive reversal.
The nearest resistance level is positioned between $2.3k and $2.4k, which has once more turned away the price. The upcoming, more significant resistance zone is situated around the $2.8k level, representing the critical threshold that ETH must surpass for the market to regain a bullish stance. The current upward movement appears to be more of a rebound within a compromised framework rather than a definitive shift in trend. On the downside, the $1.8k support zone continues to be the crucial floor that sustains the entire recovery. The 4-hour chart illustrates the recent rejection with greater clarity. ETH has been on an upward trajectory within a rising channel, successfully breaching its upper boundary and momentarily entering the $2.4k resistance zone.
However, the breakout did not hold, and the price retreated below the upper boundary, resulting in what can be described as a classic fake breakout. The unsuccessful attempt, along with the RSI retreating from an overbought condition and falling below 50, indicates that short-term momentum has considerably diminished. This does not automatically indicate that the uptrend has concluded, but it does increase the likelihood of a more extensive consolidation phase. If ETH loses traction here, the first area to monitor is the $2k region, where the lower boundary of the channel is situated. The upcoming pivotal demand zone is the $1.8k region, as highlighted on the daily timeframe. It’s essential for the market to maintain this zone to prevent a sharper downturn. Conversely, should buyers manage to reclaim $2.4k and maintain their position above it, the market might swiftly attempt another ascent toward the upper daily resistance levels. However, this scenario appears to be a bit far off at present.
Ethereum’s market sentiment has shown a slight improvement, contrasting with the earlier panic observed this year, yet it remains somewhat unconvincing. The Coinbase Premium Index has bounced back from significantly negative levels and has recently entered mildly positive territory, indicating a resurgence in US spot demand to some degree. This marks a positive change, particularly following the significant downturn observed during the selloff. The data suggests that US institutions could be making a comeback in the market, having been steady sellers since the start of the year. The premium continues to be relatively modest, not yet indicative of any aggressive accumulation. In other words, although the sentiment indicates an improved market condition, it lacks the strength to independently confirm a sustained breakout. The sentiment surrounding ETH appears to be cautiously constructive, steering clear of an outright bullish stance.