Ethereum is currently exhibiting bearish behavior, highlighted by a divergence between price action and the RSI indicator. The market appears to be in a consolidation phase, with a decisive breakout likely to determine the next significant move.

Technical Analysis

By ShayanMarkets

The Daily Chart

ETH remains stuck in a consolidation phase, trading just beneath the critical $2.8K resistance zone and the 200-day moving average. The price action within this area has lacked upward strength, with the market gradually forming an ascending flag pattern. The range is clearly defined by resistance at $2.8K and support near the $2.4K demand zone.

A clear bearish divergence has developed between the price and the RSI, signaling weakening bullish momentum and a growing presence of sellers. This divergence suggests that the current rally may be losing steam, potentially leading to a deeper correction.

Ethereum has already lost support at the 200-day MA and is now on track to retest the lower boundary of the flag near $2.4K. A decisive breakout from this structure is likely to shape the next major move.

The 4-Hour Chart

In the lower timeframe, Ethereum has been repeatedly rejected from the flag’s upper boundary around $2.8K, which has proven to be a strong resistance zone. These rejections have led to a sharp retracement toward the lower edge of the flag. After reaching support near $2.4K, Ethereum rebounded slightly, retracing back into the 0.5–0.618 Fibonacci region between $2.6K and $2.7K, commonly considered a technical correction zone.

This retracement likely represents a pause before another bearish push. With selling pressure mounting, another move toward the $2.4K level is anticipated. If Ethereum fails to hold this crucial support and breaks below the flag’s lower boundary, it could confirm the beginning of a broader corrective phase.

Onchain Analysis

By ShayanMarkets

The Binance liquidation heatmap continues to shed light on Ethereum’s current market behavior and possible next moves. After a sharp push upward, ETH touched the $2.8K level, a zone packed with short liquidation levels. This move triggered a wave of forced short closures, flushing liquidity, and fueling the rally.

Historically, during recovery phases or when bullish sentiment strengthens, markets often seek out these high-liquidity areas. Institutional players and smart money tend to exploit them, using forced liquidations to drive price momentum.

At present, Ethereum has pulled back and is stabilizing above the $2.4K support zone. However, the heatmap shows a notable liquidation cluster below this level, implying increased vulnerability to a downside sweep. This could attract strategic moves by large players aiming to trigger stop-hunts or accumulate at better prices.

In the short term, the $2.4K support remains a key level to watch. If it holds, a rebound could follow. If it breaks, expect a liquidity-driven dip toward the next cluster of stops lying just below.

SPECIAL OFFER (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.