Ethereum has reached a critical point with a head-and-shoulders neckline and the important 100-day moving average. A potential breakout could lead to a significant rally due to a large short-term liquidation cascade.
Price trends over the next few days will play a key role in determining the broader outlook for ETH. technical analysis
By ShayanThe Daily Chart
Ethereum has reached a critical point in the key resistance area consisting of the head-and-shoulders neckline and the 100-day moving average at $2.7,000. Price trends over the past few days have been flat with low volatility, reflecting the equilibrium between buyers and sellers. This shows that neither side is in control and the market is indecisive.
If Ethereum is able to break above this important resistance zone, it will confirm the completion of the H&S pattern and signal a possible medium-term uptrend. A successful breakout would also mean the asset regains its 100-day moving average and strengthens the bullish momentum. In this scenario, Ethereum price could target the $3,000 threshold, another key resistance level.
However, this area is filled with supply and failure to break out could result in a rejection and stall the upward move. Therefore, future price trends will be important in determining Ethereum's broader outlook.
4 hour chart
On the 4-hour chart, Ethereum is showing a sideways consolidation near the resistance zone separated by the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci retracement levels. This area has been a challenge for buyers, and several previous attempts to break out of this area have been rebuffed by heavy selling pressure.
Additionally, a slight bearish divergence has developed between the price and the RSI indicator, suggesting that seller power is gradually increasing. This could indicate an impending rejection in the resistance zone and trigger a decline towards the $2.3,000 support level.
Conversely, a sudden break above $2.7,000 could pave the way for further upside, potentially pushing it towards the $3,000 threshold. As a result, future price movements will provide important insight into Ethereum's next trend.
On-chain analysis
Written by Shayan
As Ethereum approaches real resistance territory around $27,000, analyzing the futures market can provide important insight into the potential price direction in the coming days. The Binance Liquidation Heatmap highlights key liquidity pools that represent the concentration of stop-loss orders and liquidation levels of futures positions.
The chart reveals a noticeably concentrated liquidity pool just above the $2.7,000 resistance area, indicating that many short positions are concentrated in this area. This is important because liquidations amplify price movements when prices approach such levels, triggering a liquidation cascade. In this case, a potential break above $2.7,000 will likely result in many short positions being liquidated, increasing buying pressure and potentially pushing the price higher further.
However, it is also possible for a false breakout to occur and lead to a bull trap. In such a scenario, large market participants or whales may take advantage of high liquidity by executing large trades that temporarily push the price above $2.7K, but the trend just reverses immediately. This rapid price reversal could catch over-leveraged traders off guard, pushing Ethereum's price back below $2.7,000 and trapping buyers who were hoping for a sustained breakout. there is.
