Ethereum continues to show strong growth, breaking key resistance levels and aiming for the $4,000 mark. However, signs of short-term exhaustion are emerging.
Technical Analysis
Over the past two weeks, Ethereum has aggressively broken through the $2,800 and $3,400 resistance levels, showcasing a very strong bullish structure. The 100 and 200-day moving averages are on the verge of making a bullish crossover near the $2,500 mark, acting as dynamic support during this impulse move. The price has now entered a major supply zone between $3,700 and $4,100, containing a cluster of bearish order blocks. If buyers maintain control, the next major target is $4,107, which is the last price high created in early 2024. However, buyers should be cautious of potential profit-taking in this zone.
Sentiment Analysis
The Open Interest chart paints a clear picture of growing market participation. Open interest has surged to its highest level over the past few years, now sitting above $28 billion. This spike is notable as it occurs during a strong price breakout, indicating the rally is driven not only by spot buying but also heavily by leveraged positions. It is crucial to monitor for any signs of long liquidations or sudden deleveraging.
Conclusion
Ethereum is currently displaying strong bullish sentiment and high speculative activity. However, close attention should be paid to ETH's behavior in the resistance zone between $3,800 and $4,100, as any rejection could lead to a short-term correction.
In summary, Ethereum continues its journey towards new heights, but the risk of correction remains. Traders should remain cautious and monitor market conditions.
