The Ethereum (ETH) digital asset recently rebounded off a critical support level at $1.5K, showing signs of a bullish reversal. However, the asset is currently grappling with a bearish order block that is preventing it from breaching the $1.8K price level. If it fails to overcome this resistance, we could see another pullback.
Examining the daily chart, the price of Ethereum formed an evident bullish reversal pattern at the $1.5K support level, swiftly rallying towards the order block at $1.8K. If a rejection from the order block occurs, the bullish fair value gap located below the price could provide the necessary support to push the asset back higher. With the 100-day Moving Average (MA) currently plummeting near the $2.2K level, Ethereum bulls could potentially eye this region as a target on the daily timeframe.
On the 4-hour chart, Ethereum has signaled a clear shift in the market structure. The previously descending channel has been broken to the upside, sparking an impulsive rally that has propelled the price from the $1.5K mark to the $1.8K level in a matter of days.
The $1.8K price point is a pivotal resistance zone which has, on several occasions over the past few months, served as a support level. Therefore, a bullish breakout above this region could potentially herald the onset of further bullish movement.
Turning to onchain analysis, the Ethereum Open Interest chart from CryptoQuant offers valuable insight into the prevailing derivatives market sentiment for Ethereum. Over the past few market cycles, Ethereum’s open interest has displayed a robust correlation with price trends, escalating during bullish phases and plummeting during corrections.
In the recent weeks, a minor recovery has been observed. Ethereum has bounced back to $1.8K, and open interest is once again ascending towards the $12B level. This rising open interest amid a price recovery suggests a resurgence in speculative positioning, indicating a possible anticipation of an imminent breakout or sustained relief bounce.
However, in light of past patterns, this also escalates the risk of a volatile flush if the price stalls or reverses drastically. Consequently, prudent risk management will remain paramount in the forthcoming weeks.
In conclusion, Ethereum has shown signs of recovery after bouncing off the $1.5K support level. However, the $1.8K resistance level remains a significant hurdle. Traders and investors alike should remain alert to these price fluctuations and adjust their strategies accordingly.
