Ethereum’s market structure is currently experiencing a notable increase in tension that merits direct attention. On-chain, the supply picture appears to be the most constructive it has been in some time. On the chart, ETH continues to face challenges in breaking through a resistance zone it has tested four times in the past six weeks. The resolution of that tension, one way or another, appears to be on the horizon. On the daily chart, the narrative remains consistent. ETH is currently priced at $2.3k, having broken through the upper boundary of the descending channel. However, the price is facing challenges at the 100-day MA, which sits just beneath the crucial $2.4k resistance zone. The 200-day MA, hovering around ~$2.8k, remains a significant barrier above this region, closely aligned with the $2.8k supply zone.
What has subtly shifted, however, is the RSI. The asset has maintained its position in the mid-to-high 50s for almost two weeks, showing resilience without the sharp decline that marked the earlier unsuccessful breakout attempt in March. This sustained momentum reading, modest as it is, indicates that the selling pressure at this level is slowly being absorbed rather than swiftly overpowering buyers. However, the daily structure will remain unconfirmed as bullish unless ETH manages to close above $2.4k and successfully defends that level during a retest. The 4-hour chart reveals a more pronounced ascending trendline that has been steering price movements since the lows of late March, currently offering support around $2.3k. ETH is currently positioned right on that trendline, following a pullback from the recent rejections at $2.4k.
The rejections came hand in hand with a bearish RSI divergence evident on the chart, as the price achieved a slightly higher high while the RSI recorded a lower value. The divergence has now mostly unfolded with the retreat to the trendline, and the RSI has settled in the low-to-mid 40s. The situation is clearly defined: maintaining the trendline preserves the series of higher lows and paves the way for another push towards $2.4k. Conversely, a close below this level would activate the $2k psychological support threshold. If that level also fails, a swift drop towards the $1.8k base would be very likely. The Ethereum Exchange Netflow chart reveals a surprisingly optimistic narrative lurking beneath the volatility of price movements. Since late January, the prevailing trend has been a consistent pattern of net outflows from exchanges. The chart displays red bars, signifying a greater outflow of ETH from exchanges compared to inflows, punctuated by only sporadic brief spikes in incoming transactions.
The acceleration in net outflows through April is particularly striking. Even though ETH has struggled to surpass the $2.4k mark, holders are persistently withdrawing ETH from exchanges at a heightened rate. This behavior indicates a focus on building conviction rather than engaging in opportunistic profit-taking. The combination of exchange reserves hitting multi-year lows alongside the netflow data illustrates a market scenario where the supply available for immediate sale is consistently diminishing, despite prices not yet mirroring this trend. Historically, that level of supply compression does not remain unnoticed by the price indefinitely.