Ethereum's recent price trajectory has fueled significant optimism within the crypto market, showcasing a strong rally and establishing new all-time highs. While the overarching sentiment appears distinctly bullish, a closer examination of key technical indicators suggests that a cautious approach is warranted as the cryptocurrency navigates potential resistance areas.
The Ascent: Bullish Momentum and Core Strengths
Ethereum has recently demonstrated impressive strength, marking a 9% rally that saw it retest the crucial $4.1k level as robust support. This surge is attributed to a combination of factors, including strong on-chain flows, a notable supply squeeze, and a resurgence in institutional demand, further evidenced by an increase in Total Value Locked (TVL). The weekly chart provides a compelling narrative, showing the $4.1k mark transforming from a resistance zone into a solid demand area. This shift, coupled with ETH's breakout to a new all-time high of $4,953, has significantly reinforced bullish conviction. The Relative Strength Index (RSI) standing at 63.30 further underscores that momentum remains firmly in favor of buyers.
Navigating Resistance and Underlying Cautions
Despite the pronounced bullish signals, certain technical indicators suggest that Ethereum may face challenges in its continued upward climb. The $4.7k region is identified as a critical supply zone that could potentially halt or reverse upward movement. Moreover, the On-Balance Volume (OBV) has not registered a new high compared to its March 2024 levels, even as the price has pushed past $4.1k. This divergence implies a potential underlying weakness in buying volume, which could impede a sustained breakthrough past the $5k mark without further significant accumulation. The area between $4,460 and $4,720 is specifically highlighted as a bearish order block that could test the resolve of ETH bulls.
Key Price Levels and Strategic Outlook
For investors and traders, understanding key price levels is crucial. Immediate strong support is anticipated around $4.1k and $3.9k, with a more substantial safety net potentially lying at $3.5k should a deeper retracement occur. Conversely, if Ethereum manages to decisively overcome the current resistance, the next significant bullish price targets, based on Fibonacci extension levels, are projected at $5.3k and $5.9k. Traders are advised against rushing to sell into the $4.5k supply zone; instead, a more strategic approach would involve waiting for a clear break above $4.7k or a retracement to the $3.5k level before considering new long positions.
