TLDR:
- Ethereum has rallied 47% in five days, outpacing Bitcoin’s 7.9% gain
- The $2.9k region appears to be a strong “magnetic zone” for ETH price
- Whale selling activity has increased recently, suggesting possible profit-taking
- Analysts expect ETH to trade sideways in the $2,400-$2,700 range before its next move
- ETH has reclaimed its $2,200-$3,900 macro range lost in March
Ethereum, the largest altcoin by market capitalization, has been on a remarkable upward trajectory, gaining 47% in just five days. This surge has helped ETH break free from a five-month downtrend and reclaim important price levels.
The rally has sparked a bullish sentiment across the crypto market. While Bitcoin rose 7.9% during the same period, Ethereum’s stronger performance has caused Bitcoin Dominance to drop from 65.36% to 62.38% in six days.
The altcoin market as a whole added $232 billion in value during this period, showing renewed investor interest beyond Bitcoin.
Technical indicators support the bullish case for Ethereum. The On-Balance Volume (OBV) indicator has reversed its downtrend, suggesting buyers are now in control of the market.
The Chaikin Money Flow (CMF) reading stands at +0.25, pointing to heavy capital inflows. The Money Flow Index (MFI) is also rising, confirming the bullish momentum.
Ethereum has now reclaimed the crucial $2,200-$3,900 macro range that it lost in March. This recovery from its 18-month low of $1,380 began in late April when ETH jumped toward the $1,800 resistance before breaking out last Thursday.
The Path Forward
The cryptocurrency has broken past several key resistance levels, including $2,000, $2,100, and $2,300, before testing the $2,600 level over the weekend. ETH reached a two-month high of $2,624 on Monday.
Market analysts expect Ethereum to move sideways before making its next significant move. Many believe the $2,400-$2,700 zone will likely be ETH’s trading range for the upcoming days.
The 6-month liquidation heatmap shows that the $2.9k region is a strong magnetic zone that should pull Ethereum higher soon. However, a breakout beyond the $3,000 psychological resistance is not guaranteed.
For ETH to push past $3,000, bullish Bitcoin movement and favorable macroeconomic conditions might need to align with Ethereum’s approach to the $2.9k level.
The 1-month liquidation heatmap shows Ethereum consolidating around $1.8k in early May, triggering short liquidations at $1.9k before moving higher. A similar but less intense pattern has emerged in recent days.
Traders should be cautious of potential retracements. The liquidation map highlights a lack of short liquidations overhead, but high leverage long positions are open. A drop to the $2.4k and $2.5k levels could wipe out many of these positions.
This suggests that traders should be wary of a possible downward liquidity hunt. Some analysts warn that if Ethereum loses its current support, it could drop to $2,300 or even below the $2,100 level.
Ethereum has filled the $2,530-$2,630 Daily CME Gap created in March. It has also formed two small CME Gaps at the $2,300-$2,400 and $2,100-$2,200 levels, which could be closed soon.
Some market watchers believe Ethereum intends to fill its Macro CME Gap between $2,900 and $3,350, signaling that a surge toward those levels could be ahead.
As whale selling activity has increased recently, traders and investors may consider booking profits and preparing for a potential retracement. At the time of writing, Ethereum trades at $2,597, showing a 5% increase in the daily timeframe.
Liquidity has built up near the $2.7k zone, with ETH already claiming some of it. Over the coming days or weeks, further consolidation below $2.8k is possible before a rally.
The Pectra upgrade has attracted interest beyond retail investors. However, it has also witnessed selling pressure with whale deposits into centralized exchanges.
Ethereum needs to break past the $2,600 resistance for short-term bullish continuation. The next crucial horizontal level sits around the $2,850-$2,900 range, a significant support and resistance area from previous market movements.
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