Ethereum Price Forecast: Can ETH Surge to $3.5K or Face Another Downturn?

Ethereum encountered a significant setback, witnessing a 13.3% decline following a breach above the 100-day moving average. The current challenge lies in surpassing the 200-day MA, a crucial juncture that could signal a bearish trend if breached.

Analyzing Ethereum’s daily chart, it is evident that the cryptocurrency broke above the critical 100-day moving average at $3,354 but faced a sharp rejection, leading to the notable drop. This decline breached the vital 100-day MA support level, potentially setting a trap for bullish investors. However, Ethereum found support around the 200-day moving average at $3.2K, a pivotal zone that could attract significant buyer demand. The future trajectory of Ethereum hinges on its performance near the substantial 200-day MA, with a break below signaling a bearish outlook towards $2.8K.

On the 4-hour chart, Ethereum encountered selling pressure near the $3.5K pivot, resulting in a breakdown below the lower boundary of the short-term ascending wedge. This breakout initiated a bearish trend, driving the price towards the previously breached descending trendline. The price movement suggests a tug of war between sellers and buyers, oscillating between the descending trendline support and the critical resistance at $3.3K. A break above $3.3K could usher in optimism and a potential bullish trend, while failure to reclaim this level might lead to a bearish retracement towards $2.8K.

In terms of on-chain analysis, Ethereum recently underwent a bearish reversal, dropping towards the crucial $3K support level. Identifying potential liquidation zones within Ethereum’s price action is essential for predicting future price movements. Liquidity is concentrated above the previous swing high of $3.5K and near $4K, indicating that short positions in perpetual markets drove the recent bearish trend. These price levels could serve as targets for strategic trading strategies, potentially supporting upward momentum in Ethereum’s price.

Understanding these technical and on-chain dynamics is vital for investors navigating Ethereum’s price movements and potential trends in the cryptocurrency market. By closely monitoring key support and resistance levels, traders can make informed decisions in a volatile market environment.