Ethereum (ETH), Targeting the Downtrend Zone... Will it Reclaim $2,200?

▲ Ethereum (ETH)

Ethereum (ETH) has regained the $1,700 level, entering a direct confrontation with the downtrend line that has hindered its ascent for several months. The ability to break through the $1,820 to $1,860 resistance has emerged as a key turning point that will determine the nature of the rebound.

According to crypto-specialized media CryptoPotato on July 4 (local time), Ethereum continued its recovery after finding support in the $1,460 to $1,530 demand zone. Buying pressure, which defended the June lows, gained momentum again, approaching the downtrend line that has repeatedly thwarted major rallies since the May highs.

During its recent ascent, it also reclaimed the $1,700 level. The next resistance zone is between $1,820 and $1,860, a key technical area that coincides with the long-term downtrend line. Bullish divergence on the Relative Strength Index (RSI) also continued, indicating a significant slowdown in bearish momentum compared to previous sell-off phases.

On the 4-hour chart, it broke out of a short-term consolidation range and reached the initial resistance level of $1,700 to $1,740. A clear break above the downtrend line would mark the first significant structural change after a prolonged decline, opening the possibility of a move towards the $1,820 to $1,860 zone. Conversely, failure to break the trendline could push it back to lower support levels, extending the correction structure.

The 1-month liquidation heatmap shows a significant concentration of leveraged positions between $2,000 and $2,200. Analysis suggests that if the recovery continues beyond the downtrend line, short position liquidations could provide additional upward momentum, accelerating movement towards this liquidity zone.

The key lies in whether buying pressure can maintain its strength after absorbing the liquidity between $2,000 and $2,200. If bullish momentum continues, a broader recovery phase could open up, but failure to hold this zone would increase the likelihood of further declines towards the large liquidity zones remaining below the market.

[Article Key Summary]

-Ethereum rebounded from the $1,460 to $1,530 demand zone, recovering the $1,700 level.

-Breaking the $1,820 to $1,860 resistance and the long-term downtrend line is a critical technical turning point.

-Leveraged liquidity is concentrated between $2,000 and $2,200, making the sustained buying pressure after a breakthrough crucial.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*