Ethereum's recent bullish vibe has taken a bit of a breather after busting through the middle trendline of a descending channel that's been in play for months. Now, we're seeing some sideways action, and while it might seem like the party's on pause, this chill phase could be setting us up for the next big move.
After a hot streak fueled by buyers in both the perpetual and spot markets, Ethereum smashed through the $2.5K resistance level. This breakout was like a neon sign flashing that buyers have their sights set on ETH's yearly high of $4K, even though the market's been a bit of a downer lately.
At the moment, Ethereum's price is in chill mode, moving sideways and possibly gearing up for a pullback towards that recently conquered trendline. If ETH dips back to the $2.5K zone and holds strong, we could see the end of this pullback and a fresh push towards the $3K mark.
Zooming in on the 4-hour chart, Ethereum's upward momentum hit a speed bump near the 0.5 Fibonacci retracement level ($2.6K). This spot has been a tough nut to crack for buyers aiming to breach the $3K level.
While ETH might dance around in this sideways consolidation or take a breather with some corrective moves in the short term, a burst of bullish energy could see it break past this resistance. If that happens, brace yourself for a potential short-squeeze that could catapult prices even higher. For now, though, we're likely in for a bit more consolidation before Ethereum makes its next big move.
The perpetual futures market is a major player in driving price action, so keeping an eye on futures traders' vibes is crucial. One way to gauge this is by looking at Ethereum’s 30-day moving average of funding rates, which tells us who’s more aggressive—buyers or sellers.
Recently, this 30-day moving average of ETH funding rates has shown a little bullish uptick after a long slump. This shift has synced up with a broader market rebound and a rise in ETH’s price, hinting at a change in the overall mood. The uptick in funding rates points to more buying activity among futures traders, suggesting the market might be getting its groove back.
For Ethereum to keep climbing and eye those higher price levels, we need to see continued demand in the perpetual futures market in the coming weeks. A steady rise in funding rates could pave the way for more price surges in the mid-term. But remember, this bullish buzz needs to keep rolling, because any major reversal in funding rates could hit pause on Ethereum’s price growth.
