Ethereum is showing signs of strength again as it attempts to reclaim key resistance levels after a sharp selloff in early October. A rebound from the lower end of the descending channel brought it back toward $4,150. Although momentum is building, the market remains cautious in the face of major resistance.
technical analysis
Written by Shayan
daily chart
On the daily chart, the asset is retesting the supply zone just below the top of the descending channel. While last week’s rejection wick clearly showed seller interest, today’s candlestick has been pushed back into that region, suggesting a potential breakout attempt.
The 100-day moving average near $4,150 is currently providing resistance, while the 200-day moving average is much lower, near $3,300. If ETH manages to close above $4,200 and the upper limit of the pattern, the next test will likely be around $4,600. Still, buyers still require strong confirmation.
4 hour chart
On the 4-hour chart, ETH has broken through the orange supply zone at $4,200 but is facing immediate rejection. This zone is just below the crest of the descending channel and increases the confluence.
The RSI is also showing overbought signals and is falling from these rising levels, indicating the possibility of a short-term rebound or decline. However, lows are still forming, and the recent rally from $3,600 has been sharp, indicating that aggressive buyers are buying the dip.
sentiment analysis
funding rate
Overall sentiment in the Ethereum futures market is showing signs of increasing optimism, but has not yet reached dangerous levels. Funding rates have consistently turned positive after some significant downsides, particularly during the sharp decline in September and early October.
This suggests that more traders are taking long positions in hopes of further upside. However, the funding amount is not excessively high, meaning the market has not yet entered the euphoria or overleverage phase. This is a healthy sign for a continuation, especially if the price manages to break above the current resistance range.
