Ethereum is currently at a critical juncture as it trades near a significant resistance zone. After multiple failed attempts to break higher, the price action suggests potential weakness, leaving the next move pivotal in determining whether Ethereum can reverse its downward trend or continue its bearish trajectory.

Key Technical Analysis for Ethereum

Ethereum is testing a major resistance area, with several technical factors indicating that a bearish continuation remains a possibility. Below, we outline the key levels to watch and the conditions that could signal a shift in market structure:

  • Ethereum faces resistance at the 0.618 Fibonacci retracement, VWAP supply zone, and a major daily support-resistance (SR) level.
  • Critical support is located around $1,055, which aligns with a high-timeframe level pivotal for maintaining bullish potential.
  • A failure to hold $1,055 could lead to a break below the swing low, confirming a continuation of the bearish daily structure.

Resistance Zone Breakdown

The current resistance zone combines several technical confluences, including:

  • 0.618 Fibonacci Retracement: A common retracement level where price often faces significant rejection.
  • VWAP Supply Zone: Volume-weighted average price acting as a dynamic resistance.
  • Daily Horizontal Level: A key area where multiple daily candles have failed to close above, reflecting seller dominance.

Despite a recent rally, Ethereum has repeatedly struggled to break above this zone, signaling persistent weakness in its price action.

Critical Support at $1,055

The $1,055 level serves as a high-timeframe weekly support zone that is crucial for Ethereum’s structure. If Ethereum retests this level and holds, it could form a higher low—an early indication of potential bullish momentum. However, a failure to hold this support would likely result in a new lower low, reinforcing the ongoing bearish trend.

“A rejection at resistance increases the likelihood of downside continuation, following the pattern of lower highs and lower lows.”

What Could Signal a Bullish Reversal?

For Ethereum to flip bullish, the following conditions need to be met:

  • Strong support reaction at $1,055, with clear signs of buying pressure and increasing volume.
  • A decisive breakout above the current resistance zone, invalidating the previous lower high.
  • Formation of a higher high on the daily timeframe, signaling a potential trend reversal to the upside.

Without these developments, Ethereum is likely to remain within its bearish framework, with downside risks persisting.

Potential Price Scenarios

If Ethereum fails to break above the current resistance zone, it will likely confirm another lower high, leading to a retest of the $1,055 support level. A breakdown below this support could spark a deeper sell-off, extending the bearish structure and pushing prices to new lows.

Conversely, if Ethereum finds strong support at $1,055 and rallies with significant volume, a breakout above resistance could mark the beginning of a bullish trend. This would establish a structural shift, with higher highs and higher lows signaling a potential recovery.

Traders and investors should monitor these key levels and watch for signs of strength or weakness in the coming sessions to gauge Ethereum’s next major move.

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