Ethereum’s price has been correcting over the last couple of weeks following a decisive rejection from the $4,000 resistance level. Yet, things can potentially change for the better in the short term.

Technical Analysis

By TradingRage

The Daily Chart

On the daily chart, the price has been rallying consistently in recent months before a definitive rejection from the $4,000 resistance level.

The market is currently in a correction phase, with ETH consolidating below the $3,600 level. If the market is able to break back above the $3,600 level, the price will likely begin its bullish continuation, potentially making a new all-time high in the coming weeks.

Source: TradingView

The 4-Hour Chart

Looking at the 4-hour timeframe, the recent consolidation becomes much more clear. The price has been forming an inverse head and shoulders pattern since its rebound from the $3,000 support zone. The Relative Strength Index has also broken above the 50% threshold, pointing to a bullish shift in momentum.

Therefore, the ETH price seems more likely to break above the head and shoulders pattern’s neckline soon and rise back toward the $4,000 level in the short-term.

Source: TradingView

On-Chain Analysis

By TradingRage

Ethereum Exchange Reserve

Recently, Ethereum experienced a notable surge in price. Yet, its recent dip below $4,000 prompted some holders to react with surprise and engage in panic selling.

Analyzing the exchange reserve metric, which gauges the quantity of Ethereum stored in exchange wallets, offers insights. Typically, an uptick in this metric indicates a higher supply ready for sale, which might trigger a price decrease.

The data illustrates that the exchange reserve has surpassed its 30-day moving average. This suggests that many holders are transferring their Ethereum to exchanges with the intent to sell. If this pattern persists and more Ethereum becomes available for sale on exchanges, it could lead to further price decreases for Ethereum in the upcoming weeks.

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Cryptocurrency charts by TradingView.