Here is the likely next target 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 within the $3,500-$4,000 range are likely as the market digests recent gains.

By Shayan

The daily chart

Ethereum’s upward trajectory has faced a pause after an impressive surge 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, returning to the $3.5K mark.

This pullback has led to renewed buying interest, which has led to a slight rally that demonstrates the market’s intent to maintain its upward movement.

However, the bearish divergence of the RSI indicator suggests a weakening of the bullish momentum. It indicates that Ethereum could face a consolidation correction phase in the medium term before resuming its rise. As the price moves towards the $4,000 psychological resistance, periods of reduced volatility and pullbacks are expected.

Source: TradingView The 4-hour chart

Over the 4-hour period, Ethereum’s bullish strength remains evident, with its break above the ascending wedge pattern and the critical resistance level of $3.5k.

The price pullback to this region and the subsequent bounce confirm the continuation of the uptrend 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 an increase in seller activity and a decrease in bullish momentum.

This scenario implies that while the price will likely move towards the $4,000 mark, it may face periods of sideways trading and minor corrections within the $3,500-$4,000 range. These moves would allow the market to consolidate before another impulsive move.

Source: TradingView

By Shayan

Ethereum price has rebounded to the critical support level of $3.5 thousand, maintaining its bullish trajectory. However, while the price action indicates a potential move to the upside, futures market metrics reveal an alarming divergence that could significantly influence market dynamics.

The open interest metric, which tracks the total number of open perpetual futures positions across all exchanges, has hit a new all-time high. This surge suggests 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. If the price faces a sudden decline or consolidation, overleveraged positions in the futures market could trigger a wave of forced liquidations, leading to a rapid price decline.

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