Ethereum has demonstrated a significant recovery after successfully holding its recent lows, as buyers steadily regain momentum. While the higher time frames remain constrained beneath major resistance, the lower time frame structure has shown improvement, and on-chain activity seems to be stabilising after months of reduced network participation. On the daily chart, it is clear that ETH remains within a larger bearish framework, notwithstanding its recent recovery. The asset remains within the descending channel that has directed the market lower for several months, while both the 100-day and 200-day moving averages persist in their downward slope above the current price, reinforcing the notion that the prevailing trend is bearish. In the wake of a pronounced drop toward the $1.5K demand zone, buyers entered the market with vigour, catalysing a relief rally that approached the significant resistance level near $1.8K. This area holds particular significance as it aligns with the upper trendline of the descending channel, establishing it as a notable confluence resistance.
The RSI has recovered above the midline after previously entering oversold territory, indicating an enhancement in bullish momentum. However, the indicator has yet to reach overbought conditions, leaving room for additional upside if resistance is broken. A decisive daily close above the $1.8K resistance could reveal the subsequent supply zone between $2.0K and $2.2K, where prior support has transitioned into resistance. Conversely, a rejection from the current area would likely redirect focus to the $1.5K support level. A breach of that threshold would heighten the likelihood of a subsequent decline toward significantly lower targets. The 4-hour frame presents a more constructive picture. Ethereum has established a distinct higher low following its breakout from the recent consolidation range above $1.5k, indicating that buyers have regained short-term control. The highlighted higher low around the $1.75K region has so far been confirmed, indicating improving market structure. The price is currently nearing the resistance zone of $1.8K to $1.85K, a level that has previously constrained recovery efforts in recent weeks.
Momentum has also strengthened, as the RSI has risen back above the neutral 50 level following a period of cooling from earlier highs. This indicates that buying pressure persists; however, resistance above may still lead to short-term consolidation. As long as ETH continues to maintain its position above the $1.7K higher-low region, the short-term bullish structure remains intact. A successful breakout above $1.85K would bolster the argument for an extension toward the $2.K to $2.2K supply zone. Failure to sustain the higher low would, however, undermine the recent recovery framework and redirect attention toward the $1.64K order block, and potentially the $1.5K critical rebound zone. Ethereum’s Active Addresses metric persists in its downward trajectory following a peak observed earlier in the year. The 30-day EMA of active addresses has been on a consistent downward trajectory, suggesting a notable reduction in network participation relative to earlier peaks. Despite this longer-term downtrend in activity, the pace of the decline appears to be moderating, suggesting that the network may be entering a stabilisation phase rather than experiencing continued deterioration.
Historically, periods in which active addresses stabilise following extended weakness frequently align with price consolidation prior to the subsequent significant directional shift. Concurrently, ETH has succeeded in rebounding from its recent troughs, although the growth in active addresses continues to be lacklustre. This divergence suggests that the ongoing rebound has been fuelled more by enhanced market sentiment and positioning rather than by a widespread revival in on-chain demand. For the recovery to evolve into a more sustainable bullish trend, a gradual increase in active addresses alongside continued price appreciation would provide stronger confirmation that capital and user activity are returning to the Ethereum network. Until then, the improving technical structure should be considered in conjunction with still-muted on-chain participation, indicating a stance of cautious optimism rather than an affirmation of a complete trend reversal.