Ethereum Faces Resistance After Recent Selloff, Consolidation Continues

Ethereum

Ethereum (ETH) is in a phase of consolidation following a recent price drop, showcasing resilience by staying above essential support levels. However, it continues to struggle against significant resistance near the $3,400 mark. The outlook for a major rally hinges on whether ETH can close above this resistance while maintaining crucial support at the $2,905 low.

Key Takeaways

Ethereum is currently stabilizing after a selloff, positioned above key support levels.
The price is capped by a descending trendline and resistance around $3,400.
Significant support is located near $2,905, with broader support between $2,750 and $2,900.
A break above $3,300 could lead to a rally towards $3,500.
Closing below $2,905 could trigger further downward movement.

Stabilization Efforts Post-Selloff

As reported in a daily update by CyrilXBT, Ethereum is striving to build a strong base following its recent decline. However, it remains hindered by the 50-day Exponential Moving Average (EMA) at approximately $3,281, which acts as a significant barrier that prevents a more robust recovery at this time.

At the latest update, ETH traded around $3,131. On the downside, immediate support is located near $3,050, while broader demand exists between $2,750 and $2,900—an area where buyers are likely to re-enter the market should selling pressure return. On the upside, resistance levels are clustered between $3,280 and $3,300, closely aligning with the 50-day EMA that serves as a critical point for potential upward movement.

Ethereum
Source: Chart from CyrilXBT on X

Looking forward, if Ethereum breaks and holds above $3,300, it could pave the way for a move back towards the $3,500 range and beyond. Conversely, failing to reclaim this resistance might result in volatile price action, potentially testing the $3,000 level and possibly revisiting the $2,800 region.

Trading Below Trendline Resistance

Crypto analyst Kamile Uray pointed out that ETH is continuously moving under a significant blue descending trendline, which acts as an important diagonal resistance barrier. This trendline limits the strength of ETH’s bullish rebounds, exerting short-term pressure downward.

Despite facing this resistance, Uray has identified a key support structure that remains vital for Ethereum's upward movement. As long as the price stays above a rising black trendline and the established low at $2,905, the potential for upward momentum remains intact. This combination of support is essential for preserving a bullish outlook in the market.

If the blue descending trendline resistance is successfully overcome, ETH could target numerous resistance levels, including $3,661, $3,878, and potentially $4,292. Uray emphasized that for a breakout to materialize, Ethereum needs to achieve a daily close above the $3,400 level, while also maintaining above the critical support of $2,905.

Ethereum
ETH trading at $3,156 on the 1D chart | Source: ETHUSDT on Tradingview.com