Ethereum Nears Make-or-Break $2K Resistance
Ethereum has made a great comeback from the $1.5K support area, but the most recent rise is now getting close to a key turning point. At the moment, the market is looking at a big supply zone that could determine whether the bounce continues to higher resistance levels or enters a new phase of consolidation. When looking at things on a daily basis, ETH stays below the 100-day and 200-day moving averages and stays in a wider downward range. But recently, prices have been moving in a good way. Buyers have been able to protect the $1.5K support zone and lead a strong rebound toward the $1.8K area. Between $2,000 and $2,150 is where the biggest support is right now. This supply zone on a higher period lines up with the resistance of the descending channel and the 100-day moving average. This makes things very difficult for bulls.
If the push into this area is successful, it will probably lead to more selling pressure and be the next big test of how strong the market is. As long as ETH stays above the $1.5K support level, the bounce is still likely to happen. Since there was a long period of correction, the latest higher low shows that buyers are slowly regaining control. ETH has recently surged into the $1.83K resistance area on the 4-hour period. This is in line with the 0.5 Fibonacci retracement level at $1.83K and the designated decision zone, which is between $1.82K and $1.88K. Price went back up after hitting the lower edge of the supply zone, showing that this area has already caused a reaction. Because of this, the current decline is a close look at demand. If buyers can keep prices in the $1.75K to $1.8K range and make a higher low, there is a much higher chance that prices will then move toward the 0.618 Fibonacci level at $1.9K.
If the price breaks above $1.9K, the 0.702 and 0.786 retracement marks at $1.96K and $2.01K could be seen. On the other hand, if the recent breakout structure fails to hold, there is a greater chance of a bigger retracement before the rise starts up again. The funding rate picture is a great way to see how the market feels. Recently, funding rates went into a very negative area as ETH got close to $1,500. This suggests that short positions are getting more crowded during the slump. In the past, times when funding was very negative have often coincided with local bottoms. This is because too much bearish positioning makes it easier for short squeezes and relief rises to happen. The way things are now seems to be following a similar pattern, as ETH is making a big comeback after a time when funding rates dropped to very low levels.
More importantly, funding has returned to positive levels, though they are still a long way below the euphoric levels seen during previous big rises. This means that leverage is slowly being recovered, but speculative excess hasn’t reached dangerous levels yet. So, the funding data makes it more likely that the price will rise even more, reaching the barrier zone between $1.9K and $2K. But the market is getting close to a key supply area, which is where profit-taking and new selling pressure may happen.
