Ethereum has surged 10% in a week, nearing key resistance at $1.8K but showing signs of losing momentum. Analysts predict a possible short-term correction as bearish divergence appears. If the price overcomes resistance at $2K, further upside could follow, with volatility increasing due to potential short liquidations.
Ethereum (ETH) has recently seen a significant uptick in its price, climbing approximately 10% this past week. As it approaches the $1.8K level, analysts observe some waning momentum, with indications of a possible bearish divergence. This may result in a short-term correction or consolidation before any push towards a bullish trend re-emerges.
On the Daily Chart, ETH’s advance was notably underpinned by strong buying activity, particularly at the pivotal support level of $1.5K. The surge has seen Ethereum touch a critical resistance area around $1.8K. This price zone has previously acted as an order block filled with substantial supply, making it challenging for ETH to surpass. Given this context, a temporary consolidation followed by a minor correction is expected before any attempts to tackle the resistance at $2.2K.
Zooming into the 4-Hour Chart, ETH’s recent movement showed a transition to a bullish structure as it broke out of a multi-month descending channel. However, after reaching the vital $1.8K resistance, price movement has generally slowed, indicating a period of low volatility. Furthermore, a bearish divergence between Ethereum’s price and the RSI signal suggests that traders might prepare for a correction. This means a continued consolidation phase or a slight pullback could occur before any further bullish advances are made.
From an on-chain perspective, the Binance liquidation heatmap paints a relevant picture of Ethereum’s market structure and possible directions. Notably, liquidity zones can attract price movements, especially near psychological benchmarks. Recently, many liquidations have been observed just above Ethereum’s prior swing high, specifically around the $2K mark. Historically, bullish recoveries tend to draw prices towards these liquidity pockets, and this encourages smart money players and institutions to trigger liquidations of trapped sellers.
ETH’s recovery off the $1.5K support suggests strong buying momentum. If this trend continues, breaching the $2K liquidity zone could lead to a flurry of short liquidations, likely increasing volatility and amplifying buying pressure. Such a scenario could swiftly propel Ethereum towards the next resistance target around $2.5K.
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Cryptocurrency charts visualized by TradingView.
