After a strong rally in May, Ethereum (ETH) continues to trade within a narrow range, facing stiff resistance around the $2,800 level. Despite maintaining its recent gains, ETH has struggled to push higher, leaving traders cautious amid mixed technical signals. As momentum and positioning build, the market appears poised for a decisive breakout or breakdown.
Technical Analysis
By ShayanMarkets
Daily Chart Overview
On the daily timeframe, Ethereum remains capped just below the critical $2,800 resistance, which coincides with the 200-day moving average. Multiple attempts to break and sustain above this zone have so far failed, suggesting the formation of a potential local top. The Relative Strength Index (RSI) is currently near 62, indicating waning bullish momentum compared to earlier phases of the rally, with signs of a possible bearish divergence emerging.
Ethereum’s price action resembles an ascending channel or a distribution phase. A clear break above $2,850 could pave the way for ETH to target the $3,000 to $3,200 zone—aligned with the Fibonacci golden ratio. Conversely, a drop below $2,400 would shift momentum in favor of sellers, with potential downside targeting the $2,100 level.
4-Hour Chart Insight
On the 4-hour chart, ETH is trading within an ascending channel, which often signals bearish pressure near resistance levels. The price recently bounced from the channel’s lower boundary near $2,500 and retested mid-range liquidity, but upward momentum has remained weak. The RSI is holding steady just above 50, reflecting market indecision.
This consolidation follows a fair value gap (FVG) from May’s breakout that has yet to be filled. A breakdown from the current channel could lead to a revisit of the gap area near $2,200. Conversely, a strong push above recent highs, supported by volume, would invalidate the bearish setup and suggest a continuation of the upward trend.
Sentiment Analysis
Ethereum’s open interest signals caution. Despite a largely flat, range-bound price over the past week, open interest has surged past previous highs seen when ETH traded above $3,000. This divergence reveals increased leverage and speculative positioning at lower prices without a confirming price rally.
Historically, such discrepancies between open interest and price often precede significant volatility—either through a short squeeze or a sharp liquidation event. With the market tightly coiled, this crowded positioning could act as a catalyst for a large move once a clear direction emerges.
