Ethereum is making an effort to rebound after successfully holding the $1.5K level yet again; however, the overall trend continues to face downward pressure. The price is currently nearing a significant confluence resistance zone, which may play a crucial role in determining whether this rebound evolves into a more substantial trend reversal or continues to be merely a relief rally within the ongoing downtrend. The daily chart continues to indicate a bearish market structure. ETH remains positioned beneath the descending long-term trendline, alongside the 100-day and 200-day moving averages, all of which persist in their downward trajectory. This alignment indicates that sellers continue to exert control from a wider viewpoint. Following the sharp decline into the $1.5K support zone, buyers managed to trigger a recovery toward the $1.8K resistance area. This level coincides with the prior horizontal support that has now transitioned into resistance and is positioned just below the descending channel trendline, establishing a notable supply zone. A successful daily close above the trendline and the 1.8K region would represent the first significant technical improvement and could reveal the next resistance between 2K and 2.2K, where another major supply zone and moving average cluster are positioned.
Failure to reclaim the current resistance would likely reinforce the broader bearish structure and increase the probability of another move toward the $1.5K support. Losing that area would pave the way toward the channel’s lower boundary below 1.2K. On the 4-hour timeframe, Ethereum has demonstrated a more robust short-term recovery following its defence of the $1.5K demand zone for the second occasion. The rebound has propelled the price back toward the upper boundary of the pattern that has confined the price since early June. ETH is currently testing the resistance level between $1.75K and $1.8K, while also facing the challenge of the descending trendline. This renders the current area especially significant for short-term direction. A confirmed breakout above both the trendline and horizontal resistance would invalidate the sequence of lower highs and could accelerate buying toward the larger 2K to 2.2K supply zone also visible on the daily timeframe.
Conversely, a rejection from this region would maintain the current bearish structure. In that case, the initial support persists around $1.7K, succeeded by the $1.6K region, while the critical demand zone remains positioned near $1.5K. Momentum has shown significant improvement during the recent advance, as indicated by the RSI approaching overbought territory. While this reflects strengthening buying pressure, it also suggests that bulls may require a phase of consolidation prior to making a decisive breakout attempt. The exchange reserve chart presents one of the more constructive long-term signals for Ethereum. Exchange balances have decreased markedly from over 21 million ETH to approximately 15.5 million ETH, indicating a sustained multi-year downward trend in the quantity of ETH stored on centralised exchanges. This trend generally suggests ongoing coin withdrawals into self-custody or long-term storage, thereby diminishing the supply readily available for sale.
Such behaviour often indicates a strengthening of investor confidence and typically creates a supportive environment during times of persistent demand. Despite Ethereum’s prolonged price correction from the 2025 highs, exchange reserves have continued to decline rather than rise, indicating that long-term holders have not been aggressively distributing their holdings into weakness. While on-chain data alone does not guarantee an immediate rally, the ongoing decline in exchange reserves reinforces the perspective that selling pressure from spot holders is still relatively constrained. If ETH can reclaim the major technical resistance around $2K and attract renewed demand, this tightening exchange supply could become an important tailwind for a stronger medium-term recovery.