Ethereum has recovered above the $3,000 mark after weeks of downside pressure, sparking hopes of a potential trend reversal. While the price action looks more constructive in the short term, key resistance levels and the broader market mood are keeping traders cautious.
Technical Analysis
The Daily Chart
On the daily timeframe, ETH has bounced cleanly from the $2,600–$2,500 demand zone and is currently trading just above $3K, right at the edge of the previous support-turned-resistance zone. This bounce is pushing the price toward the 200-day moving average, located around the $3,500 mark, which is a key psychological threshold.
The daily RSI has also recovered from oversold territory and is now printing 42.91, suggesting some bullish momentum returning to the market, but still not enough to confirm a full reversal.
Structurally, the daily chart still shows lower highs and lower lows. So, buyers need to push above the $3,500 range for a real shift in structure. If the current bounce loses steam below this resistance, sellers could step back in aggressively. The support to watch remains the $2,500 demand zone, with the $2,100 macro level acting as a last line of defense.
The 4-Hour Chart
On the 4H chart, ETH has been trading within a clean rising channel since bouncing from around $2,600, and just tapped into the $3,000 area, which aligns with the mid-term resistance zone. The structure currently resembles a bearish flag, which is often a continuation pattern, but if buyers can break and hold above the $3,200 mark, it could invalidate the bearish setup and lead to a stronger push higher toward the $3,500 region.
The asset is now consolidating within the resistance block, and the RSI is at 64.42, nearing overbought levels, which suggests a potential short-term pullback or slowdown.
On the other hand, if the flag breaks to the downside, the first level to watch is the $2,800 short-term low. Any failure to hold that zone could trigger another leg down toward the $2,500 demand zone.
On-Chain Analysis
Exchange Reserve
From an on-chain perspective, Ethereum’s exchange reserves have continued to decline at an astonishing rate, hitting a multi-year low of around 16.8M ETH. This consistent outflow from trading platforms is a strong long-term bullish signal, indicating that investors are increasingly moving their coins into cold storage or staking rather than preparing to sell.
Historically, such supply contractions on centralized exchanges have preceded major rallies, although the timing can be uncertain. This supply dynamic adds a bullish undertone to Ethereum’s broader outlook, especially if macro risk factors start to ease.
