Ethereum’s price action this week has been marked by a cautious climb near $4,000 despite recent attempts to break above the resistance level. While some positive trends exist, technical analysis suggests potential weakness if bulls fail to maintain current momentum.
The daily chart shows ETH hovering just above the 100-day moving average, currently acting as short-term resistance. While the RSI is neutral at 47, indicating a lack of clear directional bias for now.
A decisive break above $4,200 could pave the way for retesting the previous supply zone around $4,600. However, failure to breach this level may signal further bearish pressure. On the downside, the $3,500 region remains a crucial support level, and any close below it risks extending the downward trend towards $3,000 and potentially breaking the 200-day moving average.
The four-hour chart reveals rejection from the $4,200 resistance, aligning with a previous key supply zone. The current retracement found temporary demand in the fair value gap area around $4,000. However, RSI has already turned down from overbought conditions, and short-term bullish momentum has eased.
To maintain control, buyers must defend the fair value gap ($4,000) and recapture recent highs. A break below this could potentially lead to another sweep toward the lower channel boundary around $3,600 and even further down.
On-chain sentiment remains positive, as Ethereum’s exchange reserves continue to decline, reaching a historical low of 15.8 million ETH. This signals reduced selling pressure from spot holders, a bullish factor in the long term.
However, the neutral outlook on futures markets indicates no excessive leverage for either side. While this creates a balanced and spot-driven market, it also signifies a need for fresh catalysts to propel prices beyond this consolidation phase. A breakout will likely require activity from the futures market until then.
Until further developments occur, Ethereum remains in a state of consolidation within a larger corrective structure.