Although ETH is aiming for a short-term recovery, the chart still reflects that the market is mired in significant macro resistance.
Prices are about to break out of a clean trend line that has capped any gains since early October.
Momentum is improving, but buyers still need a decisive break above the $3,500 area to change the structure. Until then, higher movements remain vulnerable to rejection.
Written by Shayan
daily chart
On the daily chart, ETH continues to maintain its downtrend line, but is trading well below the 100-day and 200-day moving averages located near $3,600. This leaves the broad bias bearish, even though prices are slowly recovering from the capitulation lows around 27,000.
The key area remains $3,400-$3,500, with a significant fair value gap and bearish order block. If ETH is able to close above that level, it could signal a move towards the $4,000 zone.
Support levels remain clean. The $2,900 short-term level has been held multiple times, and below it the $2,500 and $2,200 areas are strong demand zones. As long as ETH stays above $2,900, buyers have a base to work from, but a further rally would be needed to confirm a trend reversal.
4 hour chart
The 4-hour chart shows that ETH is once again entering the downtrend line after defending the $2,900 zone. This range is clearly acting as short-term support, but buyers have not shown enough strength to reclaim the recent high of $3,200. The RSI is also moderate, with no signs of fatigue, but no strong momentum either.
A rejection here will send ETH back towards $2,900 for another test. A clean break above $3,200 followed by a retest would be the first real sign of bullish continuation. Without that, ETH would simply remain stuck under trendline compression and remain at risk of another drop in liquidity.
On-chain analysis
Open interest
Open interest has been declining since September, but prices have also retreated from their highs, indicating clear risk-off behavior. The most important part is that OI has not expanded during this recent rally. This usually indicates a lack of aggressive long positioning. Traders have been cautious and have not followed this move and are still unwinding positions from the initial rally.
This kind of sentiment can actually foster a stronger breakout later on, as rallies that start with low leverage tend to be healthier. But for now, it shows that the market doesn’t have complete faith in the upside. A rapid rise in OI during a trendline breakout would confirm that real participation is returning. Until then, ETH remains in the neutral to cautious sentiment stage.
