After a 25% surge to its highest price in several weeks, where does ETH go next? (Ethereum Price Analysis)

After a significant surge towards the $4,000 resistance level, Ethereum's native token encountered increased selling pressure, resulting in a slight consolidation.

Prices are expected to fluctuate within a narrow range and then see increased volatility before making the next big move.

Shayan

Daily Chart

Looking at the daily chart, we can see that Ethereum experienced renewed demand and buying pressure near the critical $3,000 support level, which coincides with the 0.5 ($3,133) and 0.618 ($2,906) Fib retracement levels. This buying momentum led to a notable upside, with many short positions being liquidated as the price approached the major resistance zone at $4,000.

However, significant supply around this key area has led to increased selling pressure, increased volatility and some consolidation. A decisive move above this key resistance could see a rally towards the next resistance at around $4,500.

Nonetheless, the current price action indicates a possible temporary consolidation before the next big move. In this scenario, the 100-day moving average at $3.3K would act as a key line of defense for buyers in the short term.

4 Hour Chart

The 4-hour chart provides a closer look at ETH’s recent bullish momentum, with the price showing a significant 26% surge and breaking through multiple resistance levels. However, upon reaching the critical $4,000 resistance area, large liquidation events increased the asset’s volatility, reflecting an ongoing battle between buyers and sellers.

Currently, ETH remains within a critical range bounded by the resistance at $4.1K and the support area between the 0.5 ($3.4K) and 0.618 ($3.2K) Fib levels.

If buyers can break above the $4.1K resistance and maintain the bullish momentum, a strong uptrend could form in the medium term and potentially lead to new all-time highs. That said, a period of sideways stability with heightened volatility is likely to follow before the price makes its next move.

Shayan

The perpetual futures market has been a key driver of Ethereum price movements in recent years. Analyzing futures market indicators can provide valuable insights into predicting future price movements. This chart shows Ethereum price along with funding rate, total liquidated, and open interest indicators.

This chart highlights a significant increase in the open interest metric, coinciding with a notable increase in the positive value of ETH's price and funding rate, which has reached its highest level since April 2023. This increase in open interest indicates increased activity in the perpetual futures market, with more participants taking aggressive positions. This surge in activity could be the main factor behind the recent impulsive price rally.

However, the $4,000 resistance level carries psychological importance and supply potential, leading to increased volatility. These fluctuations have led to significant liquidation of both long and short positions, as reflected in the Total Liquidation indicator. Nevertheless, overall market sentiment remains bullish, with participants expecting the uptrend to continue.

Although market sentiment is bullish, prices may enter a period of increased volatility and sideways stability before making another big move. This temporary stability will allow the market to absorb recent gains, creating a possibility for a continuation of the bullish trend.