Ethereum’s price has undergone an extensive phase of sideways consolidation subsequent to a decline toward the critical support level of $3K.

Despite this, the cryptocurrency seems confined within a range between $3K and $3.7K, and it’s unlikely that volatility will pick up unless it manages to break out in either direction.

Technical Analysis

By Shayan

The Daily Chart

A comprehensive analysis of the daily chart reveals Ethereum’s prolonged sideways consolidation after finding substantial support around the $3K threshold. This zone aligns with significant Fibonacci retracement levels ranging between 0.5 ($3190) and 0.618 ($2972) alongside the pivotal 100-day moving average at $2972. This confluence of support levels spurred a rebound in $ETH’s price, pushing it towards the upper boundary of the range at $3.7K.

However, recent price action has encountered resistance near the upper boundary of the range, suggesting the presence of sellers at this critical juncture.

Nevertheless, Ethereum remains in a phase of sideways consolidation, with market participants anticipating a bullish revival aimed at breaking above this crucial price range.

The 4-Hour Chart

A closer examination of the 4-hour chart reveals the formation of a sideways wedge pattern during a period of corrective retracements. Typically, such patterns indicate a potential continuation of the bullish trend upon breakout from the upper boundary.

Despite this, Ethereum experienced significant buying pressure in the vicinity of the noteworthy $3K support region, resulting in a renewed bullish momentum that breached the upper boundary of the wedge.

This price action underscores the dominance of buyers in the market. However, upon reaching the resistance level of $3.7K, Ethereum faced rejection, triggering a slight retracement.

Currently, following this retracement, the price has returned to the broken level of the wedge, potentially completing a pullback. Should this pullback prove successful, Ethereum’s price is poised for another upswing, targeting the $3.7K threshold. Conversely, the possibility of a bearish retracement, with the next support level at $3.2K, cannot be ruled out.

On-chain Analysis

By Shayan

While Ethereum’s price has been showing signs of rebound, it would be beneficial to determine whether this is a result of spot buying pressure or leveraged futures positions.

The following chart demonstrates the exchange reserve metric, which measures the amount of $ETH held on exchange wallets.

It is evident that after a sharp increase above the 30-day moving average a few weeks ago, the exchange reserve metric has fallen below the MA once again. This indicates that investors have been withdrawing $ETH from exchanges, which is a sign of spot buying pressure. Therefore, the spot market demand is playing a major role in a potential rally higher, which could result in a more sustainable uptrend.