Ethereum has been experiencing a period of consolidation for over a month, struggling to breach the pivotal $5,000 threshold. This phase follows a substantial rally beginning in April, during which the cryptocurrency surpassed numerous resistance levels. Analysts suggest that a continuation of this upward momentum could be possible if the market manages to break through the $4,800 resistance in the coming weeks.
Technical Analysis Overview
On the daily chart, Ethereum has maintained a pronounced uptrend within a broad ascending channel since April. Key levels reclaimed during this time include the 100-day and 200-day moving averages, currently situated around the $3,700 and $2,900 marks, respectively. The asset is presently ascending slowly within a narrower channel, positioned at the midline of the larger one. Should this small channel break down, a potential revisit to the $4,000 level may occur. Conversely, a successful bounce that breaks the $4,800 resistance could signal a historical rally toward the $5,000 mark and beyond.
Shifting to the 4-hour timeframe, the pattern of recent consolidation is evident, constrained within a range defined by the $4,300 demand zone and the $4,800 supply zone. The lower trendline of the ascending channel is approaching the current price point, indicating that a decisive market move is imminent. A breakdown below both the channel and the demand zone could lead to a retest of the $3,850 demand zone, alongside the lower boundary of the larger ascending channel. In contrast, a rebound from the current zones is likely to push prices above the $4,800 supply area and towards the $5,000 key level.
On-chain Metrics
Shifting focus from technical indicators, on-chain analysis reflects the 7-day moving average of Ethereum’s funding rates. This metric evaluates the aggressiveness of buyers and sellers in the futures market; positive values signify a stronger buyer presence. Recent data shows that the 7-day moving average funding rates have remained positive for an extended period. However, these levels are not on par with the peaks observed during March and late 2024, when prices reached long-term highs. This suggests that the market may still have potential for growth, as the futures market does not appear to be overly saturated just yet. Nonetheless, caution remains essential, as positive funding rates often precede liquidation cascades.
In summary, as Ethereum continues to navigate through a tight consolidation phase, traders and investors alike remain watchful for significant market movements that could either propel the asset towards its long-term goals or necessitate a reevaluation of strategies.
