ETH briefly broke above the trend line and tested the $3,400 resistance, but the pullback quickly disappeared. The market is once again showing signs of exhaustion and bulls are struggling to maintain control. Ethereum could be at risk of reverting back into the range unless stronger momentum intervenes.
technical analysis
Written by Shayan
daily chart
After breaking above the downtrend line, ETH entered the resistance zone between $3,400 and $3,500, but was unable to sustain the high price. The asset is still trading below its 100-day and 200-day moving averages, both of which are above the $3,500 mark, and despite the trendline reversal, the structure remains weak.
Recent candlesticks show a rejection from the same zone that capped the price in early November, clearly creating a near-term barrier. If buyers lose their grip, the next potential support is around the $2,900 bullish order block, which coincides with the broken trendline at the moment.
4 hour chart
On the 4-hour chart, it is clear that the bearish trend line was broken cleanly, but the price faced some immediate resistance near $3,400 and fell back below $3,300.
The previous resistance has now turned into a small support zone around $3,100-3,200. However, recent rejections from the top show a lack of follow-through. If this support fails, the price could fall back into the $2,950-$2,900 range. The structure remains fragile and the RSI has cooled down after an overbought period, suggesting momentum is weakening.
sentiment analysis
Open interest
Open interest has gradually increased again and is around $19.4 billion, but the price has returned to around $3.2,000. The last time we saw this combo was OI rising while price was flat or correcting, preceding a sharp move.
This can go either way, but historically, when OI rises faster than price, it indicates aggressive speculative positioning, which is often followed by liquidation. Therefore, traders should exercise caution here as the risk of a flash is not unexpected, especially if spot market demand does not continue.
