TLDR
- Ethereum price remains below $2,000 despite market-wide recovery
- US House votes to repeal IRS crypto tax rule, potentially benefiting ETH and DeFi
- Key support level at $1,825 with traders forming bullish positions
- Pectra upgrade concerns weighing on price momentum
- Technical indicators suggest potential rebound if support holds
Ethereum has struggled to gain upward momentum despite the broader crypto market entering a recovery phase. While Bitcoin climbed above $84,400 and other altcoins posted double-digit gains, ETH has remained below the $2,000 mark.
The second-largest cryptocurrency by market cap has been trading at approximately $1,887, down 4% despite positive market sentiment. This underperformance comes amid concerns about the recent Pectra network upgrade that took place on March 5.
Adding to the uncertainty, a leadership shuffle at the Ethereum Foundation has raised questions about long-term sustainability and unfinished projects. These factors have overshadowed positive developments in the broader economy, including cooler-than-expected inflation data published in the US CPI report.
On the regulatory front, the US House of Representatives has passed a bill to repeal an IRS rule that would have required decentralized finance brokers to report user transactions similar to traditional securities brokers. This bill, led by Rep. Mike Carey and Sen. Ted Cruz, has moved to President Donald Trump’s desk for final approval.
If approved, the repeal could boost ETH price by increasing the appeal of various DeFi services built on the Ethereum network. Many analysts see this as a potential catalyst for renewed interest in Ethereum-based projects.
Looking at trader positioning, data from Coinglass shows bulls deployed $753 million in leverage on ETH long positions, narrowly exceeding the $744 million leveraged on active short positions. This pattern of long leverage exceeding shorts after an extended bearish period often signals a possible bullish reversal.
The technical outlook remains mixed. The daily chart reveals a persistent downtrend with 5-day, 8-day, and 13-day Super SMAs sloping downward. This reinforces bearish control as Ethereum trades near $1,881.
A long red candlestick from the March 1 reversal marked a critical breakdown, coinciding with increased selling volume. Since then, ETH has been unable to reclaim lost ground, dropping below short-term moving averages.
The Bull-Bear Power indicator reading of -393.47 highlights extreme selling pressure, confirming the bearish trend. However, a potential bottoming-out scenario could emerge if the $1,825 support level holds.
This zone represents the last major accumulation area before the March rally attempt. A rebound from this level could trigger a relief rally toward the $2,018 and $2,111 resistance areas, where previous price consolidations occurred.
On the downside, continued rejection below the short-term moving averages would encourage sellers, increasing the risk of a drop toward $1,750. Lower support levels exist at $1,720 and $1,650.
For a clear recovery path, Ethereum must clear several resistance levels. The price faces immediate hurdles near $1,920, where a short-term bearish trend line has formed according to hourly charts.
The next key resistance sits near $1,950, followed by the psychologically important $2,000 level. A decisive move above $2,000 might send the price toward $2,060, with further potential targets at $2,120 and $2,250.
Mixed short-term signals
The hourly MACD indicator is losing momentum in the bearish zone, while the RSI remains above the 50 zone, suggesting mixed short-term signals.
If leveraged longs continue to outpace shorts, Ethereum could witness short-covering momentum, accelerating a recovery above $2,000 and keeping hopes of a potential $2,500 rebound alive in the coming weeks.
While short-term price action remains uncertain, the potential regulatory relief from the IRS tax rule repeal could provide a fundamental catalyst for renewed interest in Ethereum and its ecosystem.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
