Ethereum has sustained its rebound from the lows observed in June and is currently nearing a significant technical inflection point. While the recent rally has enhanced short-term sentiment, the asset continues to trade below a confluence of long-term resistance levels. It’s interesting to note that the liquidation landscape roughly corresponds with these technical hurdles, indicating that ETH may initially focus on above liquidity before the market determines if a more significant trend reversal is in progress or if another corrective leg lower is still ahead. On the daily timeframe, ETH continues to operate within a larger descending framework established at the start of the year. It has rebounded robustly from the significant demand zone in the vicinity of $1.45K-$1.55K and is presently approaching the critical resistance area around $1.80K-$1.85K. This area holds particular significance as it aligns with the descending trendline that has constrained price action since May. The level also signifies a significant horizontal resistance that formerly served as support prior to the June breakdown.
Despite the recent strength, ETH remains below the 100-day and 200-day moving averages, both of which continue to trend lower. The 100-day moving average is situated within the $2,000 to $2,100 resistance range, whereas the 200-day moving average is significantly elevated at approximately $2,200, thereby underscoring the prevailing bearish market framework. As long as ETH remains below the descending trendline and the resistance zone of $1.80K-$1.85K, the current movement can still be interpreted as a recovery rally within a broader downtrend. A decisive breakout above this area would shift focus toward the next major resistance at $2K-$2.1K. The 4-hour chart illustrates a distinct ascending structure that has emerged since the low observed in late June. Price has adhered to the rising channel boundaries, establishing higher highs and higher lows, indicative of strengthening short-term momentum. The market has successfully reclaimed the $1.62K-$1.64K demand zone and has subsequently established an additional support area in the range of $1.72K-$1.74K. These zones have consistently drawn in buyers during pullbacks and persist in shaping the short-term bullish framework.
However, the rally is now approaching the upper boundary of the channel and the major resistance band around 1.83K-1.85K. This establishes a natural zone where profit-taking and selling activity may arise. From a structural perspective, ETH remains constructive above the $1.72K-$1.74K support region. Losing this level would indicate the initial signs of waning bullish momentum and could reveal the lower channel boundary along with the broader support zone around $1.55K. The Binance ETH/USDT liquidation heatmap offers a significant indication concerning the forthcoming potential movement. The most significant concentration of short-side liquidity resides above the current market price, especially within the $1.95K-$2.1K range. This cluster aligns remarkably well with the daily chart resistance zone, the 100-day moving average, and the broader supply area visible on the higher timeframe.
Meanwhile, significant liquidity pools persist beneath the market in the $1.45K-$1.55K range, aligning closely with the primary daily demand zone that has underpinned ETH during the recent recovery. The alignment between the liquidation map and the technical structure indicates that the market may initially gravitate towards the overhead liquidity cluster. A move into the $2K-$2.1K area would effectively sweep a large concentration of short liquidations while simultaneously testing one of the most significant resistance zones on the chart. The reaction in that region will likely dictate the subsequent significant directional shift. If buyers succeed in reclaiming the $2K-$2.1K resistance area and establish acceptance above it, the recovery may develop into a more extensive bullish trend reversal. However, if the liquidity sweep is followed by strong selling pressure and rejection from resistance, ETH could enter another notable decline, potentially targeting the large liquidity pools resting beneath the market around the $1.45K-$1.55K support zone.