Ethereum stalls at $3,063 – Bounce or bull trap ahead?
Ethereum bulls have done well to push prices back above $3k, but the two-month downtrend remains unbroken.
Ethereum has rallied 14% since the low at $2,623 that it registered on the 21st of November. While this was a respectable bounce, it has been curtailed by the resistance at $3,063.
This level was an important lower timeframe swing level.
Based on the large holder balances metric, we see that the 10k-100k ETH holding whale cohort has been accumulating since June.
This was when the Ethereum digital asset treasury idea really took off, with Bitmine Immersion [BMNR] leading the way.
It was not all accumulation. As the chart showed, the 100-10k holders have been selling in recent months, reflecting a lack of long-term confidence.
AMBCrypto’s report captured how the Ethereum [ETH] exchange-traded funds (ETFs) saw a surge in inflows over the past week, but it was not enough to outweigh the rest of November’s outflows.
Should traders and investors expect a recovery next, or will the current downtrend resume at the psychological $3k resistance?
Ethereum could continue its gains next week
On the weekly chart, the uptrend remained intact despite the deep retracement from $4.9k to $2.6k. The swing points (orange) showed that a weekly move below $2.1k is required to flip the structure bearishly.
The structure on the 4-hour chart was bearish, despite the rally since the 21st of November. An attempted move past $3,063 met with a minor price dip.
The low trading volume and lack of buying pressure on the OBV indicated that buyers were not strong enough to drive a rally now.
However, the rejection from this resistance wasn’t brutal and quick. This could be an early sign of acceptance and fading short-term sell pressure.
A move past $3,063 and a retest as support would offer a buying opportunity. The target would be the $3.4k supply zone.
Highlighted in red, this area was important on the 1-day timeframe, where the trend has been bearish since late September.
Final Thoughts
- A move past $3,063 would likely present traders with a buying opportunity targeting the supply zone around $3.5k.
- Even though the weekly chart is bullish, Ethereum will have a hard time surpassing the resistance at $3.5k, making it a good take-profit level for bulls who bought the recent bounce.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
