Here is the next likely destination for ETH

Ethereum price is showing signs of strength, with a slight rebound after retesting the $3.5K support level. While the price is poised to challenge the $4,000 resistance soon, periodic consolidations in the $3.5K-$4K range are likely as the market digests recent gains.

By Shayan

The daily chart

Ethereum’s uptrend has paused after an impressive rise above the $3.5K resistance level. This breakout was a significant milestone, but the subsequent loss of bullish momentum led to a period of consolidation and a return to the $3.5K level.

This decline has sparked renewed buying interest and resulted in a slight rebound, showing the market’s intent to continue its upward move.

However, the bearish divergence of the RSI indicator suggests weakening bullish momentum. This suggests that Ethereum may face a medium-term consolidation correction phase before resuming its rise. Periods of lower volatility and retracements are expected as the price approaches the psychological resistance of $4,000.

The 4 hour chart

During the 4-hour period, Ethereum’s bullish strength remains evident, with the breakout above the ascending wedge pattern and the critical resistance level at $3.5K.

The price drop to this area and the subsequent recovery confirm the continuation of the upward trend towards the $4,000 mark in the medium term.

However, the bearish divergence between the price and the RSI indicator on the 4-hour chart suggests increasing seller activity and weakening bullish momentum.

This scenario implies that while the price is likely to move towards the $4,000 level, there may be periods of sideways trading and minor corrections in the $3.5K-$4K range. Such moves would allow the market to consolidate before another impulsive move occurs.

By Shayan

Ethereum price rose to the critical support level of $3.5K and maintained its uptrend. But while price action points to a possible upward move, futures market metrics show an alarming divergence that could significantly impact market dynamics.

The open interest metric, which tracks the total number of open perpetual futures positions across all exchanges, has reached a new all-time high. This increase indicates unprecedented speculative activity in the Ethereum derivatives market.

Interestingly, this increase in open interest is occurring without a corresponding new all-time high in Ethereum price.

This divergence raises concerns about increased volatility and significant liquidation cascades. Should the price face a sudden decline or consolidation, the overleveraged positions in the futures market could trigger a wave of forced liquidations that would lead to rapid price declines.