The price of Ethereum has shown resilience, recently reclaiming the $3,100 level with a daily gain of over 2%. Despite this uptick, the market remains unusually stable, with ETH trading sideways for several sessions. This consolidation has absorbed selling pressure while firmly holding the critical support at $3,000.
Current price movements suggest that Ethereum is in a coiling phase instead of facing exhaustion. The short-term trading range between $2,900 and $3,400 is pivotal and could lead to significant price swings in either direction.
Analyzing the daily chart, Ethereum appears to be forming an inverted head-and-shoulders pattern. This technical formation typically indicates a bullish trend, with potential upside targets reaching as high as $4,800. Immediate resistance is noted around $3,200, while the relative strength index (RSI) remains above the neutral 50 mark, suggesting that the momentum is not weakening.
The weekly analysis further supports the bullish outlook. A decisive close above $3,400 could confirm the bullish structure and invite more buyers into the market. Conversely, a drop below the $2,900 mark would invalidate this bullish scenario and expose Ethereum to further downside risks.
On-chain metrics reveal that Ethereum”s market value is still lagging behind the growth seen in the broader Ethereum ecosystem. The disparity between fully diluted valuation and on-chain activity indicates that the current price does not fully reflect the network”s economic potential. Moreover, short positions have amassed above the current price, suggesting that a modest rally of around 10-12% could trigger a wave of short covering and amplify bullish momentum.
Furthermore, the stability in active addresses and transaction volume reinforces that Ethereum”s underlying usage continues to thrive, adding to the argument that the current price consolidation is a sign of undervaluation rather than a fundamental weakness.
In conclusion, Ethereum”s price action above $3,000, coupled with rising liquidation pressures and the formation of a bullish chart pattern, points to a potential volatility expansion ahead. A clear breakout above $3,400 could significantly enhance the bullish narrative, while a slip below $2,900 may activate selling pressure in the near term.
