Key Points
- Ethereum is trading in a key resistance zone, with a potential impulse move higher expected.
- Despite a potential rally, a breakout may not occur due to indifferent bulls and a lack of demand.
Ethereum [ETH] has been stuck in a long-term downtrend, with the price hovering between $2550 and $2730 for almost two weeks.
The recent trend was analyzed in a detailed report, which also highlighted the increasing preference of Ethereum users for private transactions, which consume more gas, adding to the base fee’s volatility.
Is Ethereum Preparing for a Bullish Expansion?
The market structure on the daily timeframe remains bearish. The price constriction around $2.6k for the past two weeks might signal an impending sharp upward move.
This speculation is due to the imbalances left on the chart by the early August slump.
However, if Ethereum rallies to $3k, it might not be enough to trigger a breakout. The A/D indicator showed that bulls were indifferent during the recent consolidation and lacked the strength to drive prices higher.
This implies that any upward move would be driven by liquidity, not demand, and could be reversed.
Bearish Short-Term Ethereum Price Prediction
Open Interest behind Ethereum has been fluctuating with the price since August 18th, indicating a lack of conviction in the futures market.
The funding rate, previously negative, has moved into positive territory. This suggests that speculators are going long, but it’s not necessarily a strong bullish sign.
On the contrary, the decline in the spot CVD was a bearish signal, reinforcing the lack of demand for Ethereum.
The liquidation heatmap highlighted $2.7k and $2.5k as the short-term price targets. As it stands, a move toward $2.7k seems likely in the coming days.
Therefore, the short-term Ethereum price prediction is bullish, with a possible move toward $2850.
However, such a move would likely be driven by the magnetic zone and could reverse, suggesting traders might want to wait for opportunities to sell the bounce rather than buy Ethereum near the $2.9k-$3k resistance zone.
