Has Ethereum’s bullish breakout hit a roadblock at the supply zone?

• Ethereum breached the $2.8k resistance, but there may be solid argument for a bearish reversal
• Supply zone from February, if breached, could set up the next rally

Ethereum [ETH] hit a new milestone in staking recently.

34.8 million ETH, or nearly 30% of the circulating supply, is now staked. In fact, figures for the same have now surpassed the previous high set in November 2024. Anticipation of Spot ETH staking ETFs in the coming weeks could make for exciting news for investors as well.

That’s not all though as another report showed that ETH is not in a distribution phase yet, based on the trends of the whale address count metric. Traders also have opportunities to grab profits from price moves.

As anticipated a week ago, Ethereum managed to climb to the $2.7k-$2.8k resistance. However, its continued ascent beyond $2,780 was a bit of a surprise. In a post on X, trader RektProof laid out a trade idea.

The idea involved a deviation above the local high that could see a bearish reversal. It followed an idea from late May, when a test of the local low at $2.4k was anticipated to result in a rally, and it did.

With the price climbing above $2,800, and short-term momentum and sentiment firmly bullish, a bearish reversal could fool the bulls and reward short sellers who recognized the clues from the price action.

Examining the Ethereum triggers for traders to go long or short

The local resistance levels at $2,716 and $2,788 were both breached. Additionally, the price retested the $2,774-level as support before climbing past $2,800. By itself, it was a bullish signal. In fact, at the time of writing, some signs of reversal were already forming.

Back in February, the $2.885-$2,915 region had served as a resistance. It may be possible that ETH would test this supply zone and then reverse, as RektProof theorized. If this indeed happens, traders can use a drop below $2,774 to look for short entries.

On the other hand, a move past $2,915 would be a signal that long trades are favorable. The $3k level is a massive psychological obstacle to the bulls. However, with Bitcoin [BTC] near the $110k-mark, and buying pressure for Ethereum on the rise according to its OBV, a breakout might be likely.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion